Transaction costs are

Question

Quizplus · Accepted Answer

Transaction costs refer to the costs associated with making, reaching, and enforcing agreements. These costs include the costs of negotiating a deal, drafting contracts, and monitoring and enforcing compliance with the terms of the agreement. They also include the costs of information search, due diligence, and monitoring the performance of the other party. Despite not involving direct expenditure of money, transaction costs are significant because they represent the real resources expended in order to facilitate and maintain economic activity.

Transaction Costs Are