Which of the Following Is a Source of Diseconomies of Scale

question 5

Multiple Choice

Which of the following is a source of diseconomies of scale at a large firm?

• A)Labor costs
• B)Spreading specialized resources too thin
• C)Conflicts of interest
• D)Incentive processes
• E)All of the above

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Definitions:

Money Multiplier

The ratio of the amount of money created by the banking system through loans and deposits to the amount of money injected into the economy by the central bank.

Money Multiplier

The ratio of the amount of deposits created by banks to the amount of the central bank's monetary base that has been injected into the economy.

100-percent-reserve Banking

A banking system in which banks keep the full amount of their depositors' funds in reserve, meaning they do not loan out any of the deposits but instead hold 100% of deposited money.

Money Supply

The total amount of currency and monetary assets within an economy at a specific time.