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Suppose the equilibrium interest rate is 1 3 % , but the usury law prohibits charging more than 1 0 % . In this case,

Suppose the equilibrium interest rate is

13 %,

but the usury law prohibits charging more than

10 % .

In this case, the law:

Multiple choice question.

serves as a binding price floor.

serves as a binding price ceiling.

serves as a non

-

binding price ceiling.

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