The Primary Source of Scale Diseconomies Appears to Be

question 66

Multiple Choice

The primary source of scale diseconomies appears to be:

• A) a firm's inability to adopt cost saving innovation.
• B) too little demand for the firm's product.
• C) consumers who resist dealing with large firms.
• D) division of labour.

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Definitions:

Reserve Ratio

The fraction of depositors' balances that banks have to hold in reserve and not lend out.

Deposit Liabilities

The amounts of money that banks owe to their depositors, stemming from the bank accounts like savings, checking, and time deposits.

Federal Reserve

The central bank of the United States, responsible for setting monetary policy, supervising and regulating banks, and ensuring the stability of the financial system.

Required Reserve Ratio

The fraction of deposits that a bank is required to hold in reserve and not lend out, as mandated by a central banking authority.