Financial intermediaries are able to reduce transaction costs through ________ and ________.
A) economies of scale; expertise
B) restrictive covenants; unsecured debts
C) moral hazard; adverse selection
D) economies of scale; regulation

Question

Quizplus · Accepted Answer

Financial intermediaries can take advantage of economies of scale, which allows them to reduce per-unit transaction costs as they handle larger volumes of transactions. Additionally, financial intermediaries are typically staffed with experts in financial transactions, which allows them to reduce transaction costs by streamlining and optimizing processes.

Financial Intermediaries Are Able to Reduce Transaction Costs Through ________