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# A severe drought can actually lessen the total amount

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SVP
Joined: 16 Oct 2003
Posts: 1810
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A severe drought can actually lessen the total amount  [#permalink]

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11 Jul 2004, 22:43
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13. A severe drought can actually lessen the total amount
of government aid that United States farmers receive
as a group. The government pays farmers the amount,
if any, by which the market price at which crops are
actually sold falls short of a preset target price per
bushel for the crops. The drought of 1983, for example,
caused farm-program payments to drop by \$10 billion.

Given the information above, which of the following,
if true, best explains why the drought of 1983 resulted
in a reduction in farm-program payments?
(A) Prior to the drought of 1983, the government
raised the target price for crops in order to aid
farmers in reducing their debt loads.
(B) Due to the drought of 1983, United States farmers
exported less food in 1983 than in the preceding year.
(C) Due to the drought of 1983, United States
a higher market price for the 1983 crop than
for the larger crop of the preceding year.
(D) Due to the drought of 1983, United States
farmers planned to plant smaller crops in 1984
(E) Despite the drought of 1983, retail prices for food
did not increase significantly between 1982 and 1983.
Senior Manager
Joined: 25 May 2004
Posts: 282
Location: Ukraine
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12 Jul 2004, 00:04
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