Which of the Following Is NOT a Major Advantage of Direct

question 4

Multiple Choice

Which of the following is NOT a major advantage of direct finance?

• A) Direct finance reduces financial institution' fees.
• B) Direct finance allows borrowers to diversify sources of funds.
• C) Direct finance allows greater flexibility in funding types.
• D) Direct finance reduces search and transactions costs.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a specific price level.

Equilibrium

A market condition in which the equilibrium of supply and demand leads to price stability.

Equilibrium Price

The price at which the quantity of a product offered is equal to the quantity of the product in demand, thus balancing supply and demand.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at the current price, often leading to a decrease in price.