As a Firm Moves from Local Option Systems to Regional

question 43

Multiple Choice

As a firm moves from local option systems to regional and global systems

• A)agency costs increase.
• B)coordination costs decrease.
• C)transaction costs increase.
• D)both transaction and agency costs increase.
• E)all costs increase.

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Definitions:

Prime Rate

The interest rate that commercial banks charge their most credit-worthy customers, often used as a reference point for various types of loans.

Rate Of Interest

The percentage at which interest is charged or paid over a specific period of time on borrowed or saved money.

Unsecured Loan

A loan that is issued and supported only by the borrower's creditworthiness, without any collateral.

Short-Term Loan

A type of loan that is scheduled to be repaid in less than a year.