Business, 18.12.2019 03:31 alinegonzalez0027

The government decides to place limits on the interest rates banks can pay their depositors. seeing that alternative investments pay higher interest rates, depositors withdraw their funds from banks and place them in bonds. what will be the impact on banks' balance sheets?

a. banks will keep size of their balance sheets the same so the supply of loans will be kept constant.
b. banks will be forced to shrink the size of their balance sheets so the supply of loans will fall.
c. banks will be forced to increase the size of their balance sheets so the supply of loans will rise.

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The government decides to place limits on the interest rates banks can pay their depositors. seeing...

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