All but One of the Following Is Comparative Advantage of Financial

question 71

Multiple Choice

All but one of the following is comparative advantage of financial intermediaries:

• A) ability to finance businesses and governments.
• B) ability to achieve economies of scale.
• C) ability to reduce transaction costs.
• D) ability to find confidential information.

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Definitions:

Resource Allocation

The process of distributing available resources among various projects or business units.

Monopolistic Competition

A market framework where numerous sellers present unique products, granting them a certain level of influence over the market.

Allocative Efficiency

A state of resource allocation where it is not possible to make someone better off without making someone else worse off.

Productive Efficiency

A situation where an economy or firm produces goods at the lowest possible cost, utilizing all its resources efficiently without waste.