Which of the Following Arguments for Farm Subsidies Is Most

question 104

Multiple Choice

Which of the following arguments for farm subsidies is most closely associated with the parity concept?

• A) Although farmers produce necessities for the rest of us, they receive low incomes that are declining in real terms and should therefore receive price and income support.
• B) Farmers sell their output in purely competitive markets but must buy inputs from imperfectly competitive firms.
• C) Farmers cannot fully insure themselves against the risks unusual to farming, such as floods, droughts, and pests.
• D) The "family farm" is an American institution that should be protected and nurtured.

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Definitions:

Operating Activities

The component of cash flow statement that reflects the cash generated or used by the core business operations.

Net Cash

The amount of cash available after accounting for cash inflows and outflows, indicating a company's liquidity.

Indirect Method

A method of reporting net cash flow from operating activities on the cash flow statement by adjusting net income for changes in the balance sheet accounts.

Depreciable Asset

An asset that loses value over time due to wear and tear, decay, or decline in usefulness, and whose cost can be allocated over its useful life.