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Business, 09.10.2019 17:10 kaffolter25

According to an article in the economist magazine: in 1958 american onion farmers, blaming speculators for the volatility of their crops' prices, lobbied a congressman from michigan named gerald ford to ban trading in onion futures. supported by the president-to-be, they got their way. onion futures have been prohibited ever since. source: "over the counter, out of sight," economist, november 12, 2009. is it likely that banning trading futures contracts in onions reduced the volatility in onion prices? are onion farmers as a group better off because of the ban? a. yes, by prohibiting the sale of onion futures, it removed speculators from the market and thus reduced price volatility, making onion farmers better off as a group. b. yes, by prohibiting the sale of onion futures, farmers can better hedge against volatile onion prices, making them better off as a group. c. no, volatility is driven by changes in supply and demand, so banning onion futures has likely eliminated the ability of onion farmers to hedge against volatile onion prices, making them worse off as a group. d. uncertain, even though banning onion futures eliminated the ability of onion farmers to hedge against volatile onion prices, onion farmers can sell onions at a higher price now, making them better off as a group

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