Question

If you were a government official and wanted to raise the price of wheat, which of the following actions would you take?

1) Take wheat from government storage and sell it.
2) Encourage farmers to use more fertilizer.
3) Lower the price of rye.
4) Subsidize purchases of farm equipment.
5) Encourage farmers to grow less wheat.

Answer 1

To raise the price of wheat, a government official can encourage farmers to grow less wheat, lower the price of rye, or subsidize purchases of farm equipment.

Step-by-step explanation:

If you were a government official and wanted to raise the price of wheat, one of the actions you could take is to encourage farmers to grow less wheat. By reducing the supply of wheat, the demand for it can drive up the price. This can be achieved through policies such as offering incentives for farmers to switch to other crops or reducing subsidies for wheat production.

Another action that can help raise the price of wheat is to lower the price of a substitute grain like rye. By making rye more affordable, consumers are more likely to choose it over wheat, which can decrease the demand for wheat and increase its price. Additionally, subsidizing the purchase of farm equipment can also help raise the price of wheat indirectly by increasing costs for farmers, reducing the supply of wheat and driving up its price.