Economies of scale associated with financial intermediaries means:

Question

Quizplus · Accepted Answer

Economies of scale refer to the efficient use of resources as output increases. In the context of financial intermediaries, they handle a large number of similar transactions, such as depositing, withdrawing, lending or borrowing money. As they handle more and more of these similar transactions, their fixed costs become spread over a larger number of transactions, resulting in a lower cost per transaction or economies of scale. Hence, choice B is correct.

Economies of Scale Associated with Financial Intermediaries Means