1) Disintermediation resulted from
A) interest rate ceilings combine with inflation driven increases in interest rates.
B) elimination of Regulation Q (the regulation imposing interest rate ceilings on bank deposits).
C) increases in federal income taxes.
D) reserve requirements.
2) The experience of disintermediation in the banking industry illustrates that
A) more regulation of financial markets may avoid such problems in the future.
B) banks are unable to remain competitive with other financial intermediaries.
C) consumers no longer desire the services that banks provide.
D) markets invent alternatives to costly regulations.
3) Banks responded to disintermediation by
A) supporting the elimination of interest rate regulations, enabling them to better compete for funds.
B) opposing the elimination of interest rate regulations, as this would increase their cost of funds.
C) demanding that interest rate regulations be imposed on money market mutual funds.
D) supporting the elimination of interest rate regulations, as this would reduce their cost of funds.