What Impact Do Price Controls on Food Crops Have in the Developing

question 80

Multiple Choice

What impact do price controls on food crops have in the developing world?

• A) They eliminate elite ownership of the land.
• B) They cause degradation of land, especially in the tropics.
• C) They cause developed world countries to stop sending food to hungry countries.
• D) They free up credit (loans) from the developed world.
• E) They create disincentives to produce for farmers.

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Definitions:

Equation of Exchange

An economic identity that represents the relationship between the money supply, its velocity, the price level, and the number of transactions conducted, often formulated as MV = PQ.

Identity

The characteristics, attributes, or qualities that make a person or thing unique and distinguishable from others.

Nominal GDP

The value of the final goods and services produced in a given year valued at that year’s prices.

Velocity of Money

The speed at which currency is transferred from one deal to another and the frequency of usage of a currency unit within a specific timeframe.