Question: The moral hazard problem in lending occurs a. when information costs are low. b. when more risky borrowers than safe borrowers seek a loan. c.

The moral hazard problem in lending occurs a. when information costs are low. b. when more risky borrowers than safe borrowers seek a loan. c. when a borrower engages in riskier activity after a loan is made. d. bankers refuse to make a loan to a lender.

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