(Last Word) The U.S. sugar program has:
A. improved the world allocation of agricultural resources.
B. caused the world price of sugar to rise above its domestic price.
C. increased domestic sugar production.
D. lowered the incomes of U.S. sugar growers.
http://usinfo.state.gov/ei/Archive/2006/Feb/14-335636.html
To determine the correct answer, let's analyze the options and see which one aligns with the effects of the U.S. sugar program.
Option A states that the U.S. sugar program has improved the world allocation of agricultural resources. This statement suggests that the program has positively influenced the distribution and use of agricultural resources on a global scale. However, there is no evidence or logical connection between the U.S. sugar program and its impact on the world allocation of agricultural resources. Therefore, we can eliminate option A.
Option B suggests that the U.S. sugar program has caused the world price of sugar to rise above its domestic price. This statement is more plausible as protective measures, such as trade restrictions, subsidies, and quotas, can lead to higher prices domestically compared to the global market. This protectionist approach aims to shield domestic producers from foreign competition. Given this explanation, it is possible that option B is the correct answer.
Option C claims that the U.S. sugar program has increased domestic sugar production. This statement is believable as protective policies like subsidies and quotas can encourage domestic manufacturers to increase their production in order to meet the demand. However, whether this effect actually occurs in practice would require further investigation. It is worth noting, though, that option C does not necessarily address the impact on prices or profitability.
Option D proposes that the U.S. sugar program has lowered the incomes of U.S. sugar growers. This outcome could be a result of a scenario where the program artificially inflates the price of domestically produced sugar through protections, subsequently reducing the demand and profitability for sugar growers. However, we cannot be certain about this without additional information.
Based on our analysis, option B, "caused the world price of sugar to rise above its domestic price," seems to be the most reasonable answer. This aligns with the potential consequences of a protective sugar program that can lead to higher domestic sugar prices compared to the global market.