Examples of Economies of Scale Are

question 18

Multiple Choice

Examples of economies of scale are:

• A) the additional fees financial intermediaries charge on small accounts.
• B) the decrease in overall transaction costs that occur as volume increases.
• C) the reduction in the cost per transaction that occurs as the number of transactions increase.
• D) the decrease in overall information costs that occurs as more transactions are handled.

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Definitions:

Market Interest Rates

The current rates at which borrowers can obtain loans or income from investing, influenced by supply and demand in the financial markets.

Par

The face value or nominal value of a bond, stock, or other financial instrument, typically the amount on which interest payments or dividends are calculated.

Zero-Coupon Bond

A debt security that does not pay periodic interest, instead being sold at a discount and maturing at face value, generating profit at redemption.

Interest Payments

The cash outflows that a borrower makes to a lender as a compensation for the use of borrowed funds.