If the government passes a law establishing an interest-rate ceiling on credit cards, this
A) can create a surplus of credit
B) can result in other credit card fees being raised
C) usually benefits poor consumers the most
D) creates a government subsidy for borrowers

Question

Quizplus · Accepted Answer

An interest-rate ceiling on credit cards can lead to credit card companies raising other fees to compensate for the lost revenue from lower interest rates. This is a common practice as companies look for alternative ways to maintain their profit margins.

If the Government Passes a Law Establishing an Interest-Rate Ceiling