Question

the state of nevada enacts a usury statute. with respect to different types of transactions, including ordinary loans, the purpose of the statute is to group of answer choices regulate certain forms of gambling. prohibit certain contracts based on their subject matter. set a maximum rate of interest. specify clauses that must be included in certain contracts.

Answer 1

The purpose of Nevada's usury statute is to establish a maximum rate of interest for loans and other transactions, which acts as a price ceiling and protects consumers from excessively high interest rates. The correct answer is set a maximum rate of interest.

Step-by-step explanation:

The State of Nevada enacts a usury statute to set a maximum rate of interest that can be charged for different types of transactions, including ordinary loans. Usury laws, like the one in Nevada, impose an upper limit on the interest rate that lenders can charge.

These legal ceilings are meant to protect consumers from excessively high interest rates that could be seen as predatory. However, these statutory limits are often above the market interest rates and fluctuate according to market forces. These usury laws act as a price ceiling which, if set high, tend to be nonbinding and will not affect the rate charged unless the market rate soars to exceed that legal maximum.