Which Most Accurately Describes the Farm Security and Rural Investment

question 22

Multiple Choice

Which most accurately describes The Farm Security and Rural Investment Act of 2002?

• A) It continued the subsidies tied to farm prices that comprised the major share of transfers to farmers.
• B) It totally eliminated direct subsidies to farmers, because they are more likely to distort production decisions.
• C) It continued large subsidies to American farmers, which makes the US very different from most industrialized nations, which offer few agricultural subsidies and whose farmers are in a competitive market.
• D) It drastically reduced both direct subsidies and subsidies tied to farm prices.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or output, such as raw materials and labor expenses, adjusting as the volume of production increases or decreases.

Credit Policy

Guidelines that a company follows to determine the creditworthiness of customers and the terms and conditions for extending credit.

Incremental Cash Flow

The extra money a company gains by embarking on a project or investment.

Credit Policies

Guidelines a company follows to determine credit terms for customers, including who is eligible for credit and on what terms.