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Is the Strong Dollar a Problem in U.S. Agriculture

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farm_44_01_05.pdf
Title: Is the Strong Dollar a Problem in U.S. Agriculture
Author: Anderson, Craig; Koo, Won W.
Description: The 1980s experienced many financial problems in agriculture. The price of agricultural commodities was being negatively affected due to the effects of an international market place with over supply. This resulted in many US farm bankruptcies. The fall of land prices in the 1980s put a credit squeeze on many farmers as their equity in their land declined accordingly. Another factor that negatively affected farmers was a strong US dollar where US commodities much higher relative to those of a country whose currency is weaker. Tight US monetary policy of the US government helped keep interest high and inflation low which was attractive to foreigners for investment and led to a stronger US dollar valuation. The relationship between crop exports and prices on the relevant exchange rates can be explained by the terminology 'Elasticity'. export elasticity of each crop with respect to it's own price is inelastic. An decrease in prices would result in an increase in the quantity of product exported and vice versa. For each and every reaction there is an equal and opposite reaction. This implies that the export volume is not influenced very much by the price of the commodity.
Date: 1986
Subject: Trade
Prices
Economics
Permalink: http://hdl.handle.net/10365/8082

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