Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)Cost-reduction synergies are hard to predict and achieve.
• B)Because the CEOs of small firms receive information so quickly,small firms are often able to react in timely way to changes in the economic environment.
• C)Synergies usually fall into two categories: cost reductions and revenue enhancements.
• D)There may also be costs associated with size.

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Definitions:

Excess Reserves

The reserves held by banks over and above the minimum required by the central bank, available for lending or investment.

Money Supply

The total financial resources existing in an economy at a certain time.

Open Market Operations

These are financial activities where central banks buy or sell government securities in the open market to control the money supply and influence interest rates.

Required Reserve Ratio

The fraction of deposits that a bank is mandated by regulations to hold in reserve and not loan out.