Answer Happy

Which of the following statement is correct regarding the principal-agent problem? A principal-agent problem exists in loans due to a positive possibility of the principal not being repaid B The principal-agent problem can be resolved by writing a binding contract for the borrower to exert full effort 0 C The principal-agent problem leads to credit rationing in the loans market. D A principal-agent problem exists due to the negligence of the banks E Credit rationing has no impact on income inequality