Why would a usury law result in banks making less credit available to low-income households?
What will be an ideal response?
Without restrictions, banks would charge a higher rate to riskier borrowers. Lower-income households pose a greater risk of repayment than do higher-income households. With a usury law, a ceiling on interest rates is imposed on banks. Banks grant loans to the least risky applicants. As a result, less credit is made available to the most risky applicants, who tend to be lower-income households.
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The balance of trade can only worsen if income ________ relative to absorption
A) increases B) decreases C) does not change D) None of the above
Why do vertical contracts impose restraints and obligations?
Fine Edge manufactures lawn mowers. In 2014 it had $2 million worth of lawn mowers in inventory. In 2015 it sold $10 million worth of lawn mowers to consumers and had $1 million worth of lawn mowers in inventory. How much did the lawn mowers produced by Fine Edge add to GDP in 2015?
a. $11 million b. $10 million c. $7 million d. $9 million
When aggregate planned expenditure exceeds real GDP, there is
A) a planned increase in inventories. B) a planned decrease in inventories. C) an unplanned decrease in inventories. D) an unplanned increase in inventories. E) an unplanned decrease in the price level.