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PRC-3 · Chapter 10 · Question 19 of 70

If the government maintains a 'Buffer Stock' system for agricultural crops, what action does it take during a year of exceptional overproduction to stabilize prices?

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Reveal answer & explanation

Correct answer: B) It buys the surplus crop from the market to store it

Explanation

To prevent prices from crashing during a surplus, a buffer stock scheme requires the government to purchase and store the excess supply.

All 70 questions in Chapter 10Demand, Supply and Market Equilibrium MCQs with answers

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