Suppose you borrow $10,000 from your bank to purchase a vehicle. This is an example of

Name: Suppose you borrow $10,000 from your bank to purchase a vehicle. This is an example of
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This is an example of indirect financing because the bank is providing the funds to purchase the vehicle, not directly financing the purchase. Direct financing would be if the car dealership offered financing for the purchase of the vehicle. Moral hazard and transaction costs are not relevant in this scenario.

Suppose You Borrow $10,000 from Your Bank to Purchase a Vehicle