Usury Laws Result in Banks Making Less Credit Available to Lower-Income

question 77

Multiple Choice

Usury laws result in banks making less credit available to lower-income households because

• A) higher-income households will pay a higher interest rate than lower-income households.
• B) loans made to higher-income households have no risk.
• C) loans to lower-income households are riskier than loans to higher-income households.
• D) the regulated interest rate does not adequately compensate the bank for the risk of the loan to a lower-income household.

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Definitions:

Actual Interactions

The real and observable exchanges or engagements between entities, often studied in various fields including sociology, economics, and behavioral science.

Potential Interactions

Possible engagements or relationships between entities or variables in a given context, which could affect outcomes.

Actual Interactions

Real-life exchanges or communications between individuals, groups, or entities.

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry, and perfect information among buyers and sellers.