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Introduction to agricultural economics

John B. Penson, Jr&Oral Capps, Jr.&C. Parr Rosson III&Richard T. Woodward

Chapter 15

Macroeconomic Policy and Agriculture - all with Video Answers

Educators

Chapter Questions

05:38

Problem 1

The distinguishing difference between expansionary monetary and expansionary fiscal policy is the direction of movement in the ___________.

Md.Daniyal Arshad
Md.Daniyal Arshad
Numerade Educator

Problem 2

A decrease in the value of the dollar relative to foreign currencies is likely to cause the level of
imports to ____________ and the level of exports to __________ .

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01:58

Problem 3

Expansionary monetary policies are likely to cause net farm income to ________ and farm equity to _________

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
03:30

Problem 4

Expansionary monetary policies would likely cause farmland prices to increase due to rising interest rates resulting from a crowding-out effect in credit markets. $\mathrm{T}$ F

Alex Loukas
Alex Loukas
Numerade Educator
00:31

Problem 5

Real net farm income increased dramatically over the 1970-2012 period. T F

Erika Bustos
Erika Bustos
Numerade Educator
02:04

Problem 6

A major factor influencing net farm income and farmland values in the 2000 s and 2010 s was the renewable fuel mandate for producing ethanol. $\mathrm{T} \mathrm{F}$

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
01:44

Problem 7

Expansionary monetary policies to promote an economic recovery from the 2007-2009 recession were hampered by existing historically low interest rates. $\mathrm{T} \quad \mathrm{F}$

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator
01:00

Problem 8

The nation's food and fiber industry
a. includes the health care sector.
b. represents a group in independent sectors including the farm sector.
c. is affected by changes in farm policy and environmental regulations.
d. none of the above.

Breanna Ollech
Breanna Ollech
Numerade Educator
01:59

Problem 9

Expansionary fiscal policy
a. leads to growth in aggregate demand resulting from lower interest rates.
b. causes an increase in national debt.
c. can be inflationary if the economy is in the Keynesian range of the aggregate supply curve.
d. none of the above.

Banhishikha Sinha
Banhishikha Sinha
Numerade Educator
13:03

Problem 10

The national debt in the current year is
a. equal to the national debt at the beginning of the year minus the annual budget deficit.
b. equal to the national debt at the end of the year plus the annual budget deficit.
c. equal to the national debt at the beginning of the year plus the annual budget deficit.
d. none of the above.

Md.Daniyal Arshad
Md.Daniyal Arshad
Numerade Educator

Problem 11

The "Big Five" variables
a. include the rate of interest, the rate of employment, the rate of inflation, the rate of growth in real GDP, and the exchange rate.
b. represent key linkages between the sectors in the food and fiber industry.
c. include the rate of interest, the rate of unemployment, the rate of inflation, the rate of growth in real GDP, and the exchange rate.
d. none of the above.

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07:11

Problem 12

The economy of Lower Slobovia is currently experiencing an interest rate of $12 \%$ and a real GDP of $$\$ 5,000$$. The level of aggregate demand puts it in the Keynesian range of the country's aggregate supply curve and perfectly elastic range of the country's labor supply curve. Suppose the government has announced its intent to achieve a target interest rate of $6 \%$ and a real GDP level of $$\$ 10,000$$. Further assume this action would still leave the economy in the perfectly elastic ranges of its aggregate supply and labor market supply curves.
a. Identify the specific macroeconomic policy action you would recommend the government to take to achieve these twin targets.
b. What impact will the change in the general economy have on the market equilibrium for wheat in Lower Slobovia?
c. What impact would you expect the macroeconomic policy you recommended in part $a$ on an individual wheat producer's average profit? Total profit?

Alex Loukas
Alex Loukas
Numerade Educator

Problem 13

Please complete the blanks in the following table for the Lower Slobovian economy operating in the normal range of the aggregate supply curve:
$$
\begin{array}{|c|c|c|c|c|}
\hline \text { Policy Effects on } & \begin{array}{c}
\text { Expansionary } \\
\text { Monetary Policy }
\end{array} & \begin{array}{c}
\text { Expansionary } \\
\text { Fiscal Policy }
\end{array} & \begin{array}{l}
\text { Contractionary } \\
\text { Monetary Policy }
\end{array} & \begin{array}{c}
\text { Contractionary } \\
\text { Fiscal Policy }
\end{array} \\
\hline \begin{array}{l}
\text { Interest rate } \\
\text { Real GDP } \\
\text { Unemployment rate } \\
\text { Inflation rate } \\
\text { Exchange rate } \\
\text { Net farm income } \\
\text { Farmland value/acre }
\end{array} & & & & \\
\hline
\end{array}
$$

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