Banks Play Two Primary Roles in the Economy: They Take

question 166

True/False

Banks play two primary roles in the economy: They take in deposits and lend them to borrowers, and they facilitate purchases of goods and services by allowing people to write checks against their deposits.

---

Definitions:

Output

The cumulative quantity of products or services generated by a corporation or nation.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output.

Diminishing Returns

A principle in economics where each additional unit of input results in a progressively smaller increase in output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or industry's output expands.