The Argument That Interstate Banking Would Allow Banks to Grow

question 17

Multiple Choice

The argument that interstate banking would allow banks to grow and more fully achieve a reduction in operating costs per unit of output as output increases is based on

• A) economies of scale.
• B) financial leverage.
• C) diseconomies of scale
• D) capital adequacy theory

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Definitions:

Peer Networks

Social groups or communities where individuals interact with equals for the purpose of sharing information, resources, or support.

Currency Ownership

Refers to holding or possessing currency, both physical and digital, by individuals, businesses, or governments.

Fiat Currencies

Money that a government has declared to be legal tender, though it is not backed by a physical commodity.

Digital Currencies

Electronic money that exists in a digital form, enabling instant transactions and borderless transfer-of-ownership.