BANKING AFFAIRS

Detailed explanation-1: -Notes: Transaction costs are expenses incurred when buying or selling a good or service. In a financial sense, transaction costs include brokers’ commissions and spreads, which are the differences between the price the dealer paid for a security and the price the buyer pays.

Detailed explanation-2: -According to theory, there are four main types of transaction costs namely, bargaining costs, opportunity costs, search costs, and policing/enforcement costs.

Detailed explanation-3: -Transaction costs are expenses incurred when buying or selling a good or service. Transaction costs represent the labor required to bring a good or service to market, giving rise to entire industries dedicated to facilitating exchanges.

Detailed explanation-4: -Examples of common transaction costs are labor, transportation, broker fees, bank charges, commissions, etc. The nature and magnitude of transaction costs vary in different business scenarios. Nevertheless, these costs play a huge role in business management and economic growth.