Which of the Following Statements Is TRUE? Interest Rates

question 86

Multiple Choice

Which of the following statements is TRUE? Interest rates

• A)cannot exceed 60% per annum under the Criminal Code
• B)can exceed 500% in some provinces for pay day loans
• C)must be stated as an annual rate or the lender can only charge 5% per annum
• D)must disclose all fees and administrative costs tied into the interest rate for consumer loans
• E)all of the above

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Definitions:

Coase Theorem

A principle that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of rights.

Free-Rider Problem

A situation where some individuals consume more than their fair share of a public resource, or shoulder less of the cost of its production.

Public Good

A good that is both non-excludable and non-rivalrous, meaning individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.

Property Rights

Legal rights to own, use, and manage assets or property.