Farm programs such as those of the United States and the European Union cause a misallocation of international agricultural resources primarily because

Question

Quizplus · Accepted Answer

Farm programs in the United States and the European Union distort domestic and world agricultural prices by artificially inflating or supporting prices through subsidies, tariffs, and other measures. This leads to a misallocation of resources as it interferes with the natural market mechanisms that would otherwise dictate production and trade based on comparative advantage.

Farm Programs Such as Those of the United States and the European