The More Complicated a Production Process Is

question 170

Multiple Choice

The more complicated a production process is,

• A)the lower the transactions cost of using markets
• B)the lower the cost of production
• C)the more likely the market will be used to organize production
• D)the more likely that transaction costs decrease through centralized control of production
• E)the more likely that transaction costs decrease through use of markets

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Definitions:

Futures Contracts

Standardized legal agreements to buy or sell something at a predetermined future date and price, typically used for commodities or financial instruments.

Forward Contracts

Non-standardized contracts between two parties to buy or sell an asset at a specified future time at a price agreed upon today.

Default Free

An investment that is considered to have no risk of failure to pay back principal or interest.

CGB Futures

Futures contracts based on Canadian Government Bonds, which allow investors to speculate on or hedge against future changes in the value of these bonds.