Adverse selection is a barrier to financing global growth because

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Adverse selection occurs when borrowers who are more likely to default are the ones who are most likely to seek out loans. This means that lenders may be unwilling to lend to creditworthy borrowers if they cannot accurately assess the risk. This can be a barrier to financing global growth because it may limit the availability of loan capital for those firms that need it to expand their operations.

Adverse Selection Is a Barrier to Financing Global Growth Because