Why study the economics of agriculture in the United States? Give five reasons
What will be an ideal response?
Agriculture is an important industry for several reasons: (a) It is one of the nation’s largest industries, accounting for about $291 billion in gross farm income and for about 13% of consumer expenditures; (b) Agriculture, without its government farm programs, is a real world example of pure competition; (c) Farm products provide evidence of both the intended and unintended effects of government policies that interfere with supply and demand; (d) Agricultural policies offer good examples of the special-interest effect and rent-seeking behavior; and (e) Agriculture reflects the increasing globalization of markets, both in terms of the volatility of commodity prices and the difficulties of achieving free trade.
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The function of the interest rate in the Classical model was to keep the economy at full employment equilibrium by assuring that
A) actual saving equaled actual investment. B) actual saving equaled desired investment. C) desired saving equaled desired investment. D) desired saving equaled actual investment.
In a beauty contest game such as predicting the average of respondents choosing a number between 0 and 100
A) the outcome is not normally the Nash equilibrium for the game. B) the winner usually exhibits level-3 reasoning. C) the winner must understand the non-rationality of the players. D) All of the above.
The money-creating ability of the banking system may be lowered by:
a. a decrease in the cash balances that people wish to hold. b. a fall in the overall rate of inflation. c. an increase in the excess reserves. d. an increase in total deposits. e. an increase in the reserve requirement.
The deregulation of the banking industry, unintentionally, but eventually
a. created a boom for savings and loans that lasted a full decade b. had no dramatic effect on savings and loans but upset the stability of the banking system for well over a decade c. caused many savings and loans to go bankrupt within a few years d. caused many savings and loans to merge with other banks, which resulted in a surge in interest rates e. had no effect on the interest rates that savings and loans charged but it did affect the extent of loans, which more than doubled in a few years