Identify the truthfulness of the following statements.
I. Government purchase programs in agriculture tend not to be more expensive than acreage limitation programs.
II. Government purchase programs in agriculture tend to be politically more palatable than direct cash transfers, even though they induce more deadweight loss.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Question

Identify the truthfulness of the following statements. 
I. Government purchase programs in agriculture tend not to be more expensive than acreage limitation programs.
II. Government purchase programs in agriculture tend to be politically more palatable than direct cash transfers, even though they induce more deadweight loss.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.

Quizplus · Accepted Answer

Government purchase programs in agriculture tend to be more expensive than acreage limitation programs because the government must purchase the surplus crops, which can be costly. Direct cash transfers, on the other hand, are less expensive because the government simply gives farmers money, which they can then use to purchase whatever they need. Government purchase programs in agriculture tend to be politically more palatable than direct cash transfers because they are seen as a way to support farmers and keep food prices low. Direct cash transfers, on the other hand, are often seen as a handout, which can be unpopular with voters.

Identify the Truthfulness of the Following Statements