If a farmer sells a crop and uses some of the proceeds to repay the Commodity Credit Corporation (CCC),the market price is
A)Higher than the countercyclical payment.
B)Lower than the loan rate.
C)Lower than the countercyclical payment.
D)Higher than the loan rate.

Question

Quizplus · Accepted Answer

If a farmer sells a crop and uses some of the proceeds to repay the Commodity Credit Corporation (CCC), it means that the loan provided by CCC has been repaid. Hence, the market price must be higher than the loan rate to generate proceeds that can be used to repay the loan. Therefore, the correct option is D, i.e., higher than the loan rate.

If a Farmer Sells a Crop and Uses Some of the Proceeds