For a usury law to be effective, the interest rate must be

A) determined by borrowing and lending.
B) set at the market equilibrium interest rate.
C) set above the market equilibrium interest rate.
D) set below the market equilibrium interest rate.

Usury Law

Legal regulations that set maximum interest rates that can be charged on loans to protect consumers against excessively high rates.

Equilibrium Interest Rate

The interest rate at which the demand for money in an economy equals the supply of money, maintaining a balance without excess surplus or shortage.

Market Equilibrium

The state in which market supply equals market demand, leading to price stability.