Interest on loans is an example of a transactions cost that intermediaries can deal with more efficiently than individuals.

Question

Quizplus · Accepted Answer

Interest on loans is not a transaction cost; it is the cost of borrowing money. Transaction costs refer to the expenses incurred during the process of buying or selling, such as fees or commissions. Intermediaries can help reduce transaction costs, but interest is a separate financial charge.

Interest on Loans Is an Example of a Transactions Cost