Asked by Vaden Mangler on May 02, 2024
Verified
Effective usury laws
A) subsidize lenders.
B) penalize those who borrow at the below-market interest rate.
C) improve efficiency in investing.
D) keep some low-income people from obtaining credit and loans.
Effective Usury Laws
Legislation that regulates and limits the amount of interest that can be charged on loans, preventing excessively high rates.
Credit and Loans
Financial products that allow individuals or entities to borrow money, typically with the promise of repayment at a future date along with interest.
- Investigate the impact of usury legislation on economic conditions, noting its effects on the availability of borrowing options and market movement.
Verified Answer
KF
Kristi FullerMay 06, 2024
Final Answer :
D
Explanation :
Usury laws set maximum interest rates that can be charged on loans. While intended to protect borrowers from excessively high rates, these laws can also result in lenders being unwilling to offer loans to high-risk borrowers, often low-income individuals, due to the capped returns on these riskier loans. This can keep some low-income people from obtaining the credit and loans they might need.
Learning Objectives
- Investigate the impact of usury legislation on economic conditions, noting its effects on the availability of borrowing options and market movement.