Which of the Following Implies That Small FIs Are More

question 66

Multiple Choice

Which of the following implies that small FIs are more cost efficient than large FIs, and that in a freely competitive environment for financial services, small FIs may outperform their larger counterparts?

• A)Economies of scale.
• B)Diseconomies of scale.
• C)Economies of scope.
• D)Diseconomies of scope.
• E)Constant returns to scale.

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Definitions:

Supply Elasticity

Measures how the quantity supplied of a good responds to a change in the price of that good.

Market Supply Curve

A graphical representation of the quantity of goods and services that suppliers are willing and able to sell at various prices during a given period.

Complements

Goods or services that are used together, where the demand for one is increased when the price of the other decreases.

Baby Boom

A significant increase in the birth rate, particularly the post-World War II population surge between 1946 and 1964.