Many states have laws that limit the maximum amount of interest that a lender can charge a borrower.Such a law is an example of a(n)
A) equilibrium price.
B) price ceiling.
C) price floor.
D) black market price.
E) ration price.

Question

Quizplus · Accepted Answer

A law that limits the maximum amount of interest that a lender can charge a borrower is an example of a price ceiling. A price ceiling is a government-imposed limit on the price that can be charged for a good or service, typically set below the market equilibrium price. In this case, the government is setting a maximum interest rate that lenders can charge, which prevents them from charging higher rates that borrowers may not be able to afford.

Many States Have Laws That Limit the Maximum Amount of Interest