The Freedom to Farm Act of 1996 was supposed to get the government out of agriculture. So, why was emergency aid been given to farmers?
What will be an ideal response?
The basic reason has to do with the volatility of farm prices. Farm incomes suffer substantially when farm prices fall. In 1998 and 1999, the prices of several major farm commodities fell because of reduced export demand and increased production of these commodities in the United States and worldwide. The decrease in demand and increase in supply reduced the prices for several major farm products. The government wound up providing farmers with $20 billion annually in agricultural subsidies from 1999–2002, more than given before the Freedom to Farm Act.
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In using the composite-good convention in an indifference curve diagram, economists
a. compare the prices of market baskets at different points in time. b. divide the world's production into two classes, goods and services. c. divide the world's goods into two classes, high quality goods and low quality goods. d. lump together all goods but one into a single good measured in a single unit, like dollars.
The demand for the Franconian franc in the foreign exchange market equals 14,000 - 3,000e and the supply of francs in the foreign exchange market equals 2,000 + 2,000e, where e is the nominal exchange rate expressed in U.S. dollars per franc. If the franc is fixed at 3 U.S. dollars per franc, then to maintain this fixed rate Franconia's international reserves must:
A. decrease by 3,000 dollars per period B. decrease by 9,000 dollars per period C. increase by 3,000 dollars per period D. increase by 9,000 dollars per period
The key to understanding the short-run trade-off behind the Phillips curve is that an increase in inflation will decrease unemployment if the inflation is ________ by both workers and firms
A) ignored B) perfectly predicted C) expected D) unexpected
As a general rule, if pollution costs are external, firms will produce
a. too little of a polluting good. b. too much of a polluting good. c. an optimal amount of a polluting good. d. cannot be determined without additional information.