For much of the post War II timed period, ______ (regulation Q / the FHL banking system / the FDIC act) applied only to ___ (commercial banks / thrifts). This policy capped ______ (interest rates paid on deposits / profits earned by banks). This resulted in ____ (commercial banks or thrifts) having the ability to offer more attractive rates of return to depositors.

Recall the following relationship between interest rates (IR) and inflation: Nominal IR = Real IR + Rate of Inflation

From this relationship you can tell that growing inflation puts ____ (downward / upward) pressure on nominal (or market) interest rates, all else equal. With growing inflation, a bank with portfolio consisting only of long-term loans that paid a fixed interest rate _____ (would not be / would be) limited in its ability to pay higher interest rates on deposits.

True or False, by 1966 Regulation Q applied to neither thrifts nor commercial banks?