Usury laws that set maximum interest rates
A)are designed to protect the consumer.
B)interfere with the market allocation process.
C)have an effect only if the market rate is higher than the legal maximum.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Usury laws are meant to protect the consumer by setting a legal maximum interest rate that lenders can charge. However, such laws can interfere with the market allocation process by limiting the ability of lenders to charge the market rate. The laws have an effect only if the market rate is higher than the legal maximum. Therefore, all of the above statements are correct.

Usury Laws That Set Maximum Interest Rates