It is generally agreed that
A) the financial system would be more efficient if intermediaries were eliminated.
B) small- and medium-sized firms benefit by the actions of intermediaries.
C) the addition of intermediaries adds to transactions costs.
D) intermediaries should not seek to profit from reducing transactions costs.

Question

Quizplus · Accepted Answer

Small and medium-sized firms often lack the resources and expertise to engage in direct financing or investment activities. Intermediaries provide valuable services such as credit analysis, risk management, and diversification, which help these firms access funding and reduce risks. This ultimately benefits the firms and the overall economy.

It Is Generally Agreed That