Final answer:
A usury law limiting interest rates to no more than 35% would likely decrease the number of high-risk loans and potentially lower average interest rates, but might also reduce overall credit availability and exclude high-risk borrowers from the market.
Step-by-step explanation:
A law that prevented someone from charging 50% interest would be considered a usury law. Usury laws are measures taken by states or governments to set the maximum interest rate that can be charged by lenders on loans. If a usury law were to limit interest rates to no more than 35%, it would likely lead to some specific impacts on both the quantity of loans and the interest rates paid by borrowers.
In the presence of a usury law, there would likely be a decrease in the amount of high-risk loans made, as lenders would be less able to charge rates that compensate for the risk involved. However, average interest rates might decrease for the consumers, as the market adapates to the price ceiling, leading to more affordable loans for some borrowers. Nevertheless, this could come at the cost of accessibility to credit, especially for those with poor credit ratings, due to reduced profitability for lenders.
It is important to consider that while usury laws aim to protect consumers from exorbitant interest charges, they can also lead to unintended consequences such as tighter credit conditions and a reduction in the total availability of credit in the market, especially if the set limit is significantly below the market rate for high-risk loans.