1. Usury laws prohibit lenders from charging interest rates above a certain level. Suppose in a specific situation I want to borrow $1,000 from you forone week and I say that I will pay you back in one week when I am paid by the factory where I work. Suppose that a usury law also exists that prohibits charging interest rates above 20%.

Who is helped and who gets hurt by such a law?

If interest rates cannot go above 20%, then some lenders are likely to say they won't make any loans in situations like this. Explain why.

What alternatives are likely to develop?