The term economies of scope refers to the ability of an FI to generate synergistic cost savings through joint use of inputs in producing multiple outputs.

Question

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Economies of scope refer to the cost savings that arise from producing multiple outputs using the same inputs. This can be achieved through sharing resources, skills, technology, and knowledge across different product lines or services. By doing so, FIs can benefit from economies of scale, reduce production costs, and achieve greater efficiency in their operations.

The Term Economies of Scope Refers to the Ability of an FI