A binding interest rate ceiling creates _____ savings.
A) a shortage of
B) a surplus of
C) an equilibrium quantity of
D) increase in

Question

Quizplus · Accepted Answer

A binding interest rate ceiling creates a maximum legal limit on the interest rate that can be charged on a loan, which is typically lower than the market equilibrium rate. This means that borrowers will demand more loans at the lower interest rate, while lenders will supply fewer loans at the lower interest rate, creating a shortage of available loans.

A Binding Interest Rate Ceiling Creates _____ Savings