Effective usury laws cause:
A. a surplus in the market for loanable funds.
B. the quantity of loanable funds demanded to be brought into balance with the quantity
supplied.
C. the quantity of loanable funds demanded to exceed the quantity supplied.
D. the quantity of loanable funds supplied to exceed the quantity demanded.
Answer: C
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Economic models are only useful in analyzing government policy
A) True. Individuals are irrational and therefore economic models are useless. B) False. Economic models can be used to predict individual and firm behavior. C) True. Economists only model those questions for which they are hired. D) False. Economic models are not even useful in analyzing government policy.