Use the following table to define the key concepts. Concept Economies of scale L

Question

Use the following table to define the key concepts. Concept Economies of scale Liquidity Definition A situation when output increases whereas the cost per unit of output declines The ease and expense at which one asset can be converted into another asset Liquidity mismatch The implicit and explicit costs involved in savers and borrowers looking for each otherY , as Which of the following assets has the lowest level of liquidity? r S. swe A bank checking account A bank savings account A bond issued by the U.S. government O The stock of a Fortune 100 corporation

Explanation / Answer

Economies of scale : A situation when output increases whereas the cost per unit of output declines.

Liquidity: The ease and expense at which one asset can be converted into another asset.

Liquidity mismatch : A situation in which there is a lack of unity between the contractual amounts and dates of cash inflows and outflows.

The stock of a fortune 100 corporation has the lowest level of liquidity.

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