Describe two ways in which financial intermediaries help lower transaction costs in an economy.
Question
Describe two ways in which financial intermediaries help lower transaction costs in an economy.
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Solution 1
Financial intermediaries play a crucial role in the economy by reducing transaction costs in two main ways:
- Economies of Scale: Financial intermediaries, such as banks or credit unions, handle a large volume of transactions. This allows them to take advantage of economies of scale, which means t Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob
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