What factors explain why there has been a decline in the political support for agricultural subsidies in recent years?
What will be an ideal response?
Changing politics also explains why there has been a reduction in the political support for agricultural subsidies. First, there has been a decline in farm population and thus the political power of representatives from agricultural areas of the nation. There has been increased pressure to cut domestic programs including agricultural price supports. Second, the U.S. has attempted to reduce trade barriers that affect agricultural products. National subsidies for agriculture can create trade barriers, so to reduce the trade barriers, these domestic subsidies need to be cut. It is difficult for the U.S. to ask other nations to cut their subsidies unless it does the same.
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If, in a closed economy, real GDP is $30 billion, consumption is $20 billion, and government purchases are $5 billion, what is total saving in the economy?
A) $5 billion B) $15 billion C) $45 billion D) $55 billion
Because it has a direct effect on the hiring decisions of firms, a change in business confidence has a much larger impact on the level of economic activity than does a change in consumer confidence
Indicate whether the statement is true or false
Which of the following is true of a perfectly competitive firm?
a. The firm is a price maker. b. If the firm wishes to maximize profits it will produce an output level in which total revenue equals total cost. c. The firm will not earn an economic profit in the long run. d. The firm's short-run supply curve is its MC curve below its AVC curve.
If price were regulated to be equal to long-run marginal cost, the firm in Figure 13.3 would be:
A. making a zero economic profit. B. losing money. C. making a positive economic profit. D. breaking even.