If Banks Experience Higher Costs in Making Loans,they May Decide

Multiple Choice

If banks experience higher costs in making loans,they may decide to

A) engage in credit rationing rather than raise interest rates in an attempt to increase adverse selection.
B) engage in credit rationing rather than raise interest rates in an attempt to not increase adverse selection.
C) raise interest rates rather than engage in credit rationing in an attempt to decrease adverse selection.
D) raise interest rates rather than engage in credit rationing in an attempt to eliminate adverse selection.