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.