One Reason That Financial Intermediaries Exist Is That They

question 60

Multiple Choice

One reason that financial intermediaries exist is that they:

• A)Are required by government regulation
• B)Have developed low-cost methods to obtain information
• C)Are the only way to obtain information
• D)Earn high returns from lending their own funds

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Definitions:

Short Run

The period of time for which two conditions hold: The firm is operating under a fixed scale (fixed factor) of production, and firms can neither enter nor exit an industry.

Total Variable Costs

The sum of all costs that vary with the level of output or production.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as raw materials and labor expenses.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance.