Asked by Skylar Nicholson on Jun 13, 2024
Verified
Statement I: One key provision of the Depository Institutions Deregulation and Monetary Control Act of 1980 was that all depository institutions were now subject to the Fed's legal reserve requirements.
Statement II: According to the same act all thrift institutions were barred from issuing checking accounts.
A) Statement I is true and statement II is false.
B) Statement II is true and statement I is false.
C) Both statements are true.
D) Both statements are false.
Depository Institutions Deregulation and Monetary Control Act
A U.S. federal law enacted in 1980 aimed at improving the Federal Reserve's control over monetary policy, deregulating certain aspects of the banking industry.
Legal Reserve Requirements
Legal reserve requirements are regulations set by a central bank that determine the minimum amount of reserves that must be held by a financial institution.
Depository Institutions
Depository Institutions are financial entities such as banks and savings associations that accept deposits from individuals and provide loans.
- Discern the Federal Reserve's role in regulating the banking sector and its impact on the economy.
Verified Answer
EP
Emily PleimanJun 15, 2024
Final Answer :
A
Explanation :
Statement I is true as the Depository Institutions Deregulation and Monetary Control Act of 1980 did indeed subject all depository institutions to the Fed's legal reserve requirements. However, statement II is false as the same act actually allowed thrift institutions to issue checking accounts, which had previously been prohibited.
Learning Objectives
- Discern the Federal Reserve's role in regulating the banking sector and its impact on the economy.