Buy custom Show how a financial intermediary can solve problems that ultimate savers and borrowers cannot easily solve when dealing directly with each other
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| Topic: |
Business
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| Number of pages / Number of words: |
9 / 2278 |
Essay's paper body
This is possible because intermediaries (banks) benefit from economies of scale (As the Economist online explains, ‘Bigger is better. In many industries, as output increases, the average cost of each unit produced falls therefore lowering overall costs.’).
When savers and borrowers deal directly with each other, the opportunity cost (‘the true cost of something is what you give up to get it’: The Economist online (2005)) of finding out information about each other is extremely high...
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In many industries, as output increases, the average cost of each unit produced falls therefore lowering overall costs.’).
When savers and borrowers deal directly with each other, the opportunity cost (‘the true cost of something is what you give up to get it’: The Economist online (2005)) of finding out information about each other is extremely high...
Essay fragment
General points of the essay
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