If the Government Created a Surplus of an Agricultural Product

question 48

Multiple Choice

If the government created a surplus of an agricultural product due to price supports, how might they dispose of this surplus?

• A) give it away to a foreign country
• B) purchase it and store it away
• C) have the farmer destroy the crop
• D) Any of these answers might be a successful tool in disposing of agricultural surpluses.

---

Definitions:

Savings

The portion of income not spent on current consumption or taxes, instead set aside for future use or investment.

Disposable Income

The money households have for spending and saving after subtracting income taxes.

Disposable Income

The amount of income left for spending or saving after taxes have been paid.

C + I

Represents the sum of consumer spending (C) and investment spending (I) in an economy's GDP formula.