An FI Acting as an Agent in Matching Savers and Borrowers

question 30

True/False

An FI acting as an agent in matching savers and borrowers of funds can attain economies of scale and provide this service more efficiently than either the saver or borrower could on their own.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Variable Cost

Costs that change in proportion to the good or service that a business produces.

Profit

The financial gain obtained when the revenue from selling goods or services exceeds the total cost of producing them.

Fixed Costs

Costs that remain constant regardless of a business's operational levels, including rent, salaries, and loan repayments.