Asked by Jeremy Dyzenhaus on May 11, 2024
Verified
If the prices received by farmers increased and the prices paid by farmers also increased, the parity ratio
A) will necessarily be unchanged.
B) may either increase or decrease.
C) will necessarily increase.
D) will necessarily decline.
Parity Ratio
A measure used in agriculture to compare the relative values of a set of farm products over different years adjusted for inflation.
Prices Received
The amount of money received by producers or sellers in exchange for goods or services in the market.
Prices Paid
Refers to the amount of money expended by a buyer to acquire goods or services.
- Comprehend the fundamentals of the parity ratio and the impact of changing prices received and paid by farmers on it.
Verified Answer
PQ
Paige QueenMay 17, 2024
Final Answer :
B
Explanation :
The parity ratio is a measure comparing the prices farmers receive for their products with the prices they pay for inputs. If both the prices received and paid by farmers increase, the effect on the parity ratio depends on the relative rates of these changes. If the prices received increase more than the prices paid, the ratio increases, and vice versa.
Learning Objectives
- Comprehend the fundamentals of the parity ratio and the impact of changing prices received and paid by farmers on it.