The Two Ways Financial Intermediaries Can Reduce Transactions Costs Are

question 96

Multiple Choice

The two ways financial intermediaries can reduce transactions costs are ________ and ________.

• A) economies of scale; expertise
• B) moral hazard; adverse selection
• C) direct finance; indirect finance
• D) stocks; bonds

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Definitions:

Decisions Made Quickly

A process where choices or judgments are reached in a short period of time, often to respond to immediate needs or opportunities.

Simple

Easily understood or done; presenting no difficulty.

Organizational Structure

The way in which a company or organization is organized, including the roles, responsibilities, and communication systems that govern how its activities are directed towards achieving its objectives.

Central Authority

The governing body or group at the highest level of organizational hierarchy, responsible for making major decisions.