If there is a drought that ruins the wheat crop of a large wheat exporting county resulting in higher international wheat prices, domestic wheat prices in free-trading countries such as England will increase as well, regardless of how much wheat, if any, that country imports.
If the statement concerning wheat supply is true, which of the following policies in a free-market nation is most likely to reduce the long-term economic impact on that nation of steep and unexpected increases in international wheat prices?
A) Maintaining a large wheat reserve sufficient to meet demand for several months.
(B) Increasing domestic production of wheat for the following year.
(C) Contracting with new wheat exporting nations.
(D) Increasing the number of wheat imports.
(E) Reducing domestic consumption of wheat by switching to alternative grains where possible.
i think both E and A are good... whats your answer and why did you choose it?
If the statement concerning wheat supply is true, which of the following policies in a free-market nation is most likely to reduce the long-term economic impact on that nation of steep and unexpected increases in international wheat prices?
A) Maintaining a large wheat reserve sufficient to meet demand for several months.
(B) Increasing domestic production of wheat for the following year.
(C) Contracting with new wheat exporting nations.
(D) Increasing the number of wheat imports.
(E) Reducing domestic consumption of wheat by switching to alternative grains where possible.
i think both E and A are good... whats your answer and why did you choose it?
