Which Function of an FI Reduces Transaction and Information Costs

question 26

Multiple Choice

Which function of an FI reduces transaction and information costs between a corporation and an individual and may encourage a higher rate of savings?

• A)brokerage services
• B)asset transformation services
• C)information production services
• D)money supply management

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Definitions:

Data Collected

Information gathered through observation, experimentation, surveys, or other methods, which can be analyzed to gain insights or make decisions.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and generating profit.

Fixed Costs

Costs that do not vary with production or sales levels, including rent, insurance, and salaries, which remain constant regardless of business activity levels.

Operating Income

The profit realized from a business's operations, calculated by subtracting operating expenses from gross profit.