Question

Information costs:______

A) are the costs of buying and selling financial claims.
B) include the costs that savers incur to determine the credit worthiness of borrowers.
C) include the costs borrowers incur to discover the best investments to make with the money they have borrowed.
D) are zero in financial markets, but high for transactions carried out through financial intermediaries.

Answer 1

Answer: The correct answer is "B) include the costs that savers incur to determine the credit worthiness of borrowers.".

Explanation: The information costs are all those in which the saver/investor must incur to acquire all the information that is useful for making investment decisions, a balance must be found between the cost of obtaining the information and the benefits that are can provide us

Information costs include the costs that savers incur to determine the credit worthiness of borrowers.