Disabling formal institutes does not affect transaction costs.

Name: Disabling formal institutes does not affect transaction costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Formal institutions play a crucial role in reducing transaction costs by providing a clear legal framework, enforcing contracts, and reducing uncertainties. Without formal institutions, transaction costs are likely to increase due to the absence of a reliable and enforceable legal system, leading to higher risks and costs associated with economic activities.

Disabling Formal Institutes Does Not Affect Transaction Costs