Question

The costs in time and other resources that parties incur in the process of facilitating an exchange of goods and services are called

Answer 1

The correct answer is transaction costs.

Step-by-step explanation:

Transaction costs can be defined as the cost that is incurred in facilitating a transaction related to the exchange of goods and services. These costs are related to resources used in facilitating transactions and the cost of time involved.

Reduction in the transaction costs makes an economy more efficient in the production of goods and services. In the case of externalities, private solutions will be able to find efficient solutions only if the transaction costs are low otherwise the government has to intervene.