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Financial institutions have expertise to produce information about borrowers. Therefore, they can (4 ) A) help reduce the moral hazard problems by screening out bad

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Financial institutions have expertise to produce information about borrowers. Therefore, they can (4 ) A) help reduce the moral hazard problems by screening out bad credit risk from good ones. E B) help reduce adverse selection problems by actively monitoring borrower's activities.- C) Both (A) and (8) are true. D) Both (A) and (B) are false

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