ARE 321 EXAM
1 QUESTIONS
AND ANSWERS
What is the 2017 student loan debt - Answers -1.41 trillion
What is the 2014 credit card debt - Answers -.857 trillion
What is the U.S farm debt - Answers -.357 trillion
Profligate class definition - Answers -spender, consumer, position where products own
you. (too short run)
Profligate definition - Answers -wildly extravagant or completely given up to dissipation
and licentiousness
Miser class definition - Answers -Hoarder, saver, money ownes you (too long run)
Invest, put down alot of capital, where they got it BORROWING
Plus good weather
Weak U.S dollar good or bad? - Answers -good for exports
Bad for imports
In the 1970s huge increase in - Answers -Land prices-- price increased faster than did
the income from land. Then came the notion to buy it before it goes higher or before its
gone or "it wont come for sale again"
, In the 1970s there was also a rapid increase in the use of - Answers -debt capital to
expand ag production
Key factors as to why debt capital was used more - Answers -1. At the same time,
inflation in the overall economy was high and getting higher, but interest rates did not
increase at the same rate (interest rates lagged behind)
RESULT: negative real interest rates
2. Average cost pricing of interest to ag borrowers instead of marginal cost pricing sent
the wrong signals.
3. Liberal credit policies of ag lenders
4. Asset based (collateral) lending
5. Federal tax laws encouraged asset purchases (and debt capital indirectly)
6. High expectations for the future (high optimism)
Real interest rate - Answers -real interest rate= nominal interest rate - inflation
1980s depression, also know as the - Answers -farm financial crisis
U.S economy entered a major recession in 1980-1981 but by the mid 1980s teh -
Answers -general economy recovered and started a booming recovery that would last
for about 20 years of unprecedented economic growth called Reaganomics
Miser definition - Answers -a mean grasping person, especially one who is extremely
stingy with money.
Frugal class definition - Answers -good steward, wise manager
Frugal definition - Answers -characterized by or reflecting economy in the use of
resources.
The BLANK of the 1970s, 80s and current 00s is not new to agriculture. - Answers -
boom- bust cycle
Late 1880s to mid 90s-- farm BLANK tied to farm product BLANK and low BLANK
coupled with BLANK and BLANK credit led to political activism known as the BLANK
movement, advocating more government regulation of markets and involvement in
agriculture. - Answers -depression
Surpluses
Prices
Scarce
1 QUESTIONS
AND ANSWERS
What is the 2017 student loan debt - Answers -1.41 trillion
What is the 2014 credit card debt - Answers -.857 trillion
What is the U.S farm debt - Answers -.357 trillion
Profligate class definition - Answers -spender, consumer, position where products own
you. (too short run)
Profligate definition - Answers -wildly extravagant or completely given up to dissipation
and licentiousness
Miser class definition - Answers -Hoarder, saver, money ownes you (too long run)
Invest, put down alot of capital, where they got it BORROWING
Plus good weather
Weak U.S dollar good or bad? - Answers -good for exports
Bad for imports
In the 1970s huge increase in - Answers -Land prices-- price increased faster than did
the income from land. Then came the notion to buy it before it goes higher or before its
gone or "it wont come for sale again"
, In the 1970s there was also a rapid increase in the use of - Answers -debt capital to
expand ag production
Key factors as to why debt capital was used more - Answers -1. At the same time,
inflation in the overall economy was high and getting higher, but interest rates did not
increase at the same rate (interest rates lagged behind)
RESULT: negative real interest rates
2. Average cost pricing of interest to ag borrowers instead of marginal cost pricing sent
the wrong signals.
3. Liberal credit policies of ag lenders
4. Asset based (collateral) lending
5. Federal tax laws encouraged asset purchases (and debt capital indirectly)
6. High expectations for the future (high optimism)
Real interest rate - Answers -real interest rate= nominal interest rate - inflation
1980s depression, also know as the - Answers -farm financial crisis
U.S economy entered a major recession in 1980-1981 but by the mid 1980s teh -
Answers -general economy recovered and started a booming recovery that would last
for about 20 years of unprecedented economic growth called Reaganomics
Miser definition - Answers -a mean grasping person, especially one who is extremely
stingy with money.
Frugal class definition - Answers -good steward, wise manager
Frugal definition - Answers -characterized by or reflecting economy in the use of
resources.
The BLANK of the 1970s, 80s and current 00s is not new to agriculture. - Answers -
boom- bust cycle
Late 1880s to mid 90s-- farm BLANK tied to farm product BLANK and low BLANK
coupled with BLANK and BLANK credit led to political activism known as the BLANK
movement, advocating more government regulation of markets and involvement in
agriculture. - Answers -depression
Surpluses
Prices
Scarce
