During the Great Depression,as real interest rates rose,good credit risks were less likely to seek loans.This process illustrates the phenomenon of ________.

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Adverse selection refers to the situation in which borrowers or lenders with good credit or risk profiles are discouraged from participating in the market, while those with risky credit profiles are more likely to participate. In the context of the Great Depression, as real interest rates rose, borrowers with good credit were less likely to seek loans, leading to adverse selection in lending.

During the Great Depression,as Real Interest Rates Rose,good Credit Risks