PURCHASING POWER OF FARM PRODUCTS. 



Unchangeable measures of length and weight are now in use, so that no further 

 calculation is necessary after the inches, pounds, or grams are known, but there 

 is no unchangeable measure of value. The value of gold itself changes and 

 money itself follows the law of supply and demand. 



Probably the best measure of the general price level is the index number of 

 wholesale prices of all commodities as given by the Bureau of Labor Statistics. 

 (See Table II.) 



If the index number for the price of a particular farm product is compared 

 with the index number of wholesale prices of all commodities, it is possible to 

 determine whether or not the price is relatively high. The index numbers for 

 each farm product are given in Table XVIII. If these are divided by the index 

 numbers of wholesale prices as given on page 3, the purchasing power is obtained. 

 If the purchasing power is 100, it means that the product can be exchanged for 

 the usual quantity of other things. That is, if a farmer sold a given quantity of 

 this product and used the money to buy all kinds of other commodities at whole- 

 sale he would be able to buy the normal quantity. If the purchasing power 

 is 50, it means that he would be able to buy half the normal amount. 



56 



