Final answer:
It is true that interest will generally not be imputed for loans of $10,000 or less between individuals. This IRS provision helps to simplify tax matters for these small loan amounts. Other considerations regarding the impact of changes in interest rates affect bond prices and the effects of usury laws on loan and interest rate volumes.
Step-by-step explanation:
The statement that interest will generally not be imputed for loans of $10,000 or less between individuals is True. The Internal Revenue Service (IRS) has a provision that allows for the exclusion of imputed interest for small loans, including those between family and friends, as long as the aggregate amount does not exceed $10,000. This rule is put in place to simplify tax matters and relieve both the lender and borrower from tax complications for relatively small personal loans.
Concerning questions about the influences of interest rates, generally, a lower interest rate might lead to a decrease in financial savings, as earning potential from savings is reduced, which could encourage spending or investing instead of saving. However, this does not necessarily hold true for all individuals, since savings decisions are complex and influenced by various factors.
Regarding the bond price relative to changes in interest rates, if the market interest rates rise, one would generally expect to pay less than $10,000 for a bond that was originally priced at $10,000, as its yield must increase to match the market rates, which means a decrease in its price. Conversely, if the market rates fall, the bond's price would likely be higher than $10,000.
In cases where a usury law limits interest rates to no more than 35%, it is expected that the volume of loans made would decrease because lenders may be less willing to lend at a capped rate, especially if it does not compensate for the risk involved. Additionally, the interest rates paid on loans that are issued could potentially increase up to the usury limit.