Which one of the following is an example of a market imperfection in the domestic capital market?
A)transactions costs
B)costs of obtaining information
C)ceilings on interest rates
D)restrictions by nationality of investor

Question

Quizplus · Accepted Answer

Ceilings on interest rates are a market imperfection in the domestic capital market as they restrict the ability of lenders to earn a fair return on their investments, and borrowers to access capital at a fair rate. Transactions costs and costs of obtaining information are common market frictions, but they do not restrict the functioning of the market itself. Restrictions by nationality of investor are a market imperfection in the international capital market, not the domestic market.

Which One of the Following Is an Example of a Market