The Presence of Transactions Costs and Information Costs

question 63

Multiple Choice

The presence of transactions costs and information costs

• A)lowers the cost of funds to borrowers.
• B)raises the expected return to lenders.
• C)lowers the expected return to lenders.
• D)increases the efficiency of the financial system.

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Definitions:

Capitalism

is an economic system characterized by private or corporate ownership of capital goods, by investments determined by private decision, and by prices, production, and the distribution of goods that are determined mainly in a free market.

Alienation

A state or experience of being isolated, detached, or disconnected from oneself, others, or society, often used in social sciences to describe a sense of estrangement produced by social structures.

Giorgio Agamben

An Italian philosopher known for his work on sovereignty, the state of exception, and concepts of biopolitics.

Zones Of Exception

Areas where normal laws and rights are suspended, often linked to state sovereignty and control.