-In order to reduce the possibility of adverse selection, banks should raise the interest rates charged on loans.

Name: -In order to reduce the possibility of adverse selection, banks should raise the interest rates charged on loans.
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Raising interest rates can actually exacerbate adverse selection because it may deter lower-risk borrowers from taking out loans, leaving a pool of higher-risk borrowers who are still willing to pay the higher rates.

-In Order to Reduce the Possibility of Adverse Selection, Banks