Why can’t the government sell surplus agricultural products it has purchased domestically?
What will be an ideal response?
The government can’t sell the surplus domestically because it would drive the domestic price down. Because the objective of the policy is to support the higher price, the government must either store the surplus or ship it abroad.
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Indicate whether the statement is true or false
Firms entering a perfectly competitive industry will cause the price of the product to
a. fall. b. rise. c. remain constant. d. become more responsive to consumer demand.
In the open-economy macroeconomic model, if the supply of loanable funds increases, net capital outflow
a. and the real exchange rate increase. b. and the real exchange rate decrease. c. increases and the real exchange rate decreases. d. decreases and the real exchange rate increases.
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A. educational attainment. B. geographical location. C. ability to achieve. D. None of these is true.