Final answer:
Alf and his gang are engaged in usury, which means charging interest on loans at a rate higher than is allowed by law. A usury law limiting interest rates to 35% would typically not impact the market unless actual interest rates exceed this threshold, but it serves as a safeguard against predatory lending.
Step-by-step explanation:
Alf and his gang are engaged in usury, which is the illegal act of charging interest over the rate allowed by law. In this scenario, the state limits the interest rate on loans to 13%, but Alf is charging 22% interest, which is a clear violation of the usury laws. Usury laws are in place to prevent lenders from taking excessive advantage of borrowers, especially those who are unable to access traditional banking services due to credit issues or other factors.
Looking at the impact of a usury law that limits interest rates to no more than 35%, it would likely create a ceiling that may not affect the market's normal operations if the equilibrium interest rate is below this threshold. Such a high ceiling might not reduce the number of loans made nor the interest rates paid unless market rates are unusually high. However, it does provide a legal limit to prevent excessive and predatory lending practices.