Question

Why did President Franklin D. Roosevelt pay southern farmers to plant less cotton during the early 1930s? A) He wanted to increase importing of cotton from Mexico. B) He wanted to convince farmers to grow soy beans instead. C) He wanted to move cotton production to the Western states. D) He wanted to restrict the supply in order to raise its price

Answer 1

When he created the Agricultural Adjustment Act (AAA) as part of the New Deal, FDR hoped to improve the luck of American farmers, including those in the Southeast. With the creation of the AAA, he wanted to restrict the supply of cotton in order to raise its price. This is a matter of the basic economic prinicple of supply and demand.

Answer 2

D) He wanted to restrict the supply in order to raise its price. Farmers were growing too much of their crops and as result demand started to go down. This also affected the price of other crops and commodities. One of the solutions that FDR made was to create an artificial decrease in production that would contribute to the increase of prices.