Explain why lenders may ration the quantity of credit


Problem

a. Give at least two reasons why higher profits may increase the rate of investment.

b. Explain why lenders may ration the quantity of credit rather than merely charge higher interest rates to more risky borrowers.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: Explain why lenders may ration the quantity of credit
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