World food prices have hit an all-time high, driven up by price increases in whe

Question

World food prices have hit an all-time high, driven up by price increases in wheat, corn, sugar, and oils. The price of wheat has doubled within a six-month period. While these soaring prices have had only a modest effect on U.S. inflation, they have devastated the world's poor who spend a majority of their income on basic food staples. Politicians and scientists continue to argue over the cause of rising food prices. Some believe the jump in prices can be attributed to bad policies set by the U.S. Federal Reserve, and others believe that commodities speculation is to blame. But most scientists, including those from the U.S. Department of Agriculture, believe higher food prices were caused by two major factors: (1) low production due to severe weather around the world, including extreme heat in Russia, drought in Brazil, and flooding in Australia: and (2) a large portion of the world's corn going toward ethanol production instead of food. Regardless, the world's poor continue to suffer. Which of the following are plausible solutions to the given problem? Choose 3 answers Set government policies that will lower the cost of basic food staples to the poorest people. Rely on world food organizations to redistribute and ration the food in a fair and equitable way so the poor get a share. Reconsider tax incentives offered for production of alternative fuels. Develop ways of growing crops indoors so weather will no longer be a factor. Consider the effects of greenhouse gases on climate change and set policies accordingly. Increase subsidies to encourage farmers to produce more of the basic crops such as wheat and corn. Keep U.S.-produced crops in the United States to take care of the nation's poor.

Explanation / Answer

Set government policies that will lower the cost of basic food staples to the poorest people Consider the effects of greenhouse gases on climate change and set policies accordingly Increase subsidies to encourage farmers to produce more of the basic crops such as wheat and corn

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