Credit rationing occurs when lenders charge higher interest rates on the loans they make to riskier borrowers.

Name: Credit rationing occurs when lenders charge higher interest rates on the loans they make to riskier borrowers.
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Credit rationing occurs when lenders limit the amount of loans to borrowers or refuse to lend altogether, even if borrowers are willing to pay higher interest rates, due to concerns about the borrower's ability to repay.

Credit Rationing Occurs When Lenders Charge Higher Interest Rates on the Loans