If the price level doubles, the

Banks use credit rationing rather than simply raising the interest rate charged borrowers with higher default risks because

A) of fear of adverse selection problems. B) of interest rate ceilings in many states. C) of fear of offending the loan applicants. D) use of credit rationing is encouraged by the Federal Reserve.

People with fixed incomes fare best in an inflationary period

a. True b. False Indicate whether the statement is true or false