Asked by Braxton Graves on Jul 25, 2024
Verified
Usury laws lead to
A) a surplus of loanable funds.
B) a shortage of loanable funds.
C) a floor under interest rates.
D) more lenders than borrowers.
Usury Laws
Regulations designed to protect consumers by capping the interest rate that lenders can charge on credit.
Loanable Funds
The supply of money that savers have made available to borrowers.
- Analyze the synergy between usury laws and interest rate levels, focusing on the effects shared by borrowers and lenders alike.
Verified Answer
RP
Regina PellegrinoJul 29, 2024
Final Answer :
B
Explanation :
Usury laws set a maximum interest rate that can be charged on loans, which can lead to a shortage of loanable funds. This is because lenders may not be willing to lend at the lower interest rate, reducing the supply of loans available.
Learning Objectives
- Analyze the synergy between usury laws and interest rate levels, focusing on the effects shared by borrowers and lenders alike.