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TRUE OR FALSE? An irony of usury laws is that these laws can increase the role...

TRUE OR FALSE? An irony of usury laws is that these laws can increase the role of non-economic factors in the

    allocation of loanable funds.

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Answer #1

Usury laws are the regulations that govern the amount of interest that can be charged on a loan. These laws specifically target the practice of charging excessively high rates on the loans. These laws set a cap on the maximum amount of interest that can be levied. In the US, each state is responsible for setting its usury laws.

One of the limitations of usury laws is that they do not let the lenders set interest rates based on market forces of demand and supply and thus increases the role of non-economic factors in the allocation of loanable funds.

Thus, the given statement is True.

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