In an effort to reduce the surplus of dairy products, agricultural legislation paid dairy farmers to slaughter their herds and sell them to packinghouses (meat producers) in 1996-1997 . How did this influence the market for beef?
a. demand increased, leading to higher beef prices
b. demand decreased, leading to lower beef prices
c. supply increased, leading to lower beef prices
d. supply decreased, leading to higher beef prices
Question 2
If the government wanted to offset the effect of a fall in consumer confidence on AD, it might:
a. decrease government purchases.
b. decrease taxes.
c. increase taxes.
d. do either a. or c.
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