Credit rationing refers to
A)the increase in the interest rate that occurs when the demand for credit increases.
B)the increase in the interest rate that occurs when the supply of credit increases.
C)the increase in the interest rate that occurs when the supply of credit decreases.
D)a restriction in the availability of credit.

Question

Quizplus · Accepted Answer

Credit rationing refers to a situation where there is a restriction in the availability of credit, which may be caused by factors such as the lender's assessment of credit risk, borrower's inability to provide collateral, or government regulations. It may result in some borrowers being unable to access credit, despite their creditworthiness, or only being able to borrow at higher interest rates.

Credit Rationing Refers to