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?
Test yourself: pick an answer
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.
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