-If the dotted horizontal line represents the effect of a usury law then there is a ____ of loanable funds of _____ billion dollars.

Question

Quizplus · Accepted Answer

A usury law sets a maximum interest rate on loans. If the dotted horizontal line is below the equilibrium interest rate, it would cause a shortage because the quantity of loanable funds demanded would exceed the quantity supplied at that interest rate. The specific amount (275 billion dollars) would depend on the details provided in the question's diagram or data, which are not visible here, but the concept of a shortage is correct under these conditions.

-If the Dotted Horizontal Line Represents the Effect of a Usury