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imports were due to the fact that we ate more than we pro- 

 duced. Food prices fell and rose because of the forces of 

 world-wide deflation and inflation. Our dwindling exports 

 were no more than a scapegoat and a whipping boy. 



General Price Level Affected by Monetary Factors 



Changes in the general level of the farm prices of our food 

 come about mainly with changes in the general level of all 

 prices, in this country and in the world. 



The general level of prices of all commodities is affected 

 by two groups of factors : those concerning the commodities 

 and those concerning the money in which the prices are ex- 

 pressed. 



Factors that Make Price 



There are five factors affecting the general price level: the 

 supply of and demand for commodities, the supply of and 

 demand for money, and the amount of precious metal in the 

 monetary unit. These factors are constantly fluctuating, and 

 rarely fluctuate by the%ame amount at the same time. At one 

 time the fluctuations in the five factors may be compensat- 

 ing, and at others non-compensating. If the fluctuations in 

 the factors are compensating, the price level is stable. If not, 

 deflation or inflation occurs. 



The five factors that make price are relatively simple. 

 When one considers the innumerable possible combinations 

 of fluctuations in each of the factors, there are a myriad pos- 

 sible answers. For simplicity, let us assume that each of the 

 five factors could fluctuate by only five similar amounts. In 

 that case there could be 3,125 different prices. 



Irving Fisher once said that if you taught a parrot to say 

 "Supply and Demand" he could answer any economic ques- 

 tion. But the parrot does not know the factors that affect 

 supply and demand, the amount they can vary, or the innu- 



