What are the various ways that financial intermediaries can take advantage of economies of scale?
What will be an ideal response?
Standardized legal contracts enable the cost of writing contracts to be spread over many loans. Bank loan officers are able to process loans efficiently by specializing in evaluating and processing loans. Fees for high-dollar purchases of financial assets do not differ much from fess for low-dollar purchases. Financial intermediaries can use sophisticated computers to provide financial services.
You might also like to view...
In the face of the 2007-2009 recession, the President, Congress, and the Fed
a. decided to rely on the self-correcting mechanism of the economy to eliminate inflation. b. decided to rely on the self-correcting mechanism of the economy to reduce unemployment. c. pursued an active policy to balance the budget and fight inflation. d. pursued an active policy to expand aggregate demand.
The Laffer curve illustrates that
a. deadweight loss rises by the square of the increase in a tax. b. deadweight loss rises exponentially as a tax increases. c. tax revenue first rises, then falls as a tax increases. d. Both a) and b) are correct.