It Has Been Argued That Banks Tended Not to Take

question 29

Multiple Choice

It has been argued that banks tended not to take full advantage of issuing notes, thereby passing up potential profits because

• A) the profit amounts were small.
• B) they were not the types of profits conservative bankers wanted to pursue.
• C) regulations and opportunity costs involved with the issuance itself limited the profits.
• D) All of the above are correct.
• E) Only a and c are correct.

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Definitions:

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the finished product.

Direct Labor

The cost of labor that can directly be associated with the production of goods or services.

Overhead

Indirect costs related to production or operations, excluding direct labor and direct materials costs.

Incremental Income

The additional income that is generated by increasing sales or production by one additional unit.