Which function of an FI reduces transaction and information costs between a corporation and an individual and may encourage a higher rate of savings?

Question

Quizplus · Accepted Answer

Brokerage services can reduce transaction costs by efficiently matching individuals with investment opportunities that fit their needs and objectives. This can encourage a higher rate of savings as individuals may feel more confident in their investment decisions with the guidance of a broker. Additionally, brokerages may provide information about different investment options to further reduce information costs. Asset transformation services involve converting one type of financial asset into another, and while they can potentially lead to cost savings, they are not directly related to reducing transaction or information costs between corporations and individuals. Information production services involve the gathering and dissemination of financial information and may be beneficial for investors, but do not directly reduce transaction or information costs. Money supply management involves the control of the money supply by a central bank and is not related to reducing transaction or information costs between corporations and individuals.

Which Function of an FI Reduces Transaction and Information Costs