ecomzo (2019) Question 1 a) Briey explain the concepts of \"adverse selection\" and \"moral hazard\" in the context of the market for loans. [5 marks] b) Provide an example of a situation in which a lender faces an adverse selection problem and raising interest rates would exacerbate the adverse selection problem. [10 marks] 0) Provide an example of a situation in which a lender faces a moral hazard problem and raising interest rates would exacerbate the moral hazard problem. [10 marks] Question 2 a) Explain the \"hold-up problem\" in the context of long-term relationships between a bank and a rm. [15 marks] b) How could a rm avoid being \"held-up" by (Le, facing a \"hold-up problem" with) a bank? [10 marks]