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Adverse selection in credit market implies OA. There are some risky borrowers and some safe borrowers, but the bank cannot tell them apart OB. Only
Adverse selection in credit market implies OA. There are some risky borrowers and some safe borrowers, but the bank cannot tell them apart OB. Only risky borrowers will apply for loans when interest rates are too high O C. Raising terest rate to clear the market is not in the best interest of the bank O D. All of the above
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