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Question
Suppose that the doubling of a bank's deposit funding allows the bank to triple its loan output. What can you conclude about the bank's production technology?
A. It exhibits economies of scale using the production approach.
B. It exhibits diseconomies of scale using the production approach.
C. It exhibits diseconomies of scale using the intermediation approach.
D. It exhibits economies of scale using the intermediation approach.
E. It exhibits neither economies nor diseconomies of scale.
Answer
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