When Disintermediation Occurs,the Banking System ________ Deposits and Bank Lending

question 5

Multiple Choice

When disintermediation occurs,the banking system ________ deposits and bank lending ________.

• A) gains; increases
• B) gains; decreases
• C) loses; increases
• D) loses; decreases

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Definitions:

Variable Costing

A costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold and reports fixed overhead as an expense of the period.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of goods or services produced.

Common Fixed Expenses

Expenses that remain constant in total over a relevant range of time or production volume and are shared by multiple business segments or products.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much revenue is contributing to cover fixed expenses and profit.