Multiple Choice
Lenders may be reluctant to increase the interest rate they charge borrowers because these higher interest rates may
A) attract less creditworthy borrowers, increasing adverse selection.
B) attract less creditworthy borrowers, decreasing adverse selection.
C) attract more creditworthy borrowers, increasing adverse selection.
D) attract more creditworthy borrowers, decreasing adverse selection.
Correct Answer:
Verified
Correct Answer:
Verified
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