During the late nineteenth century in the United States, many farmers borrowed heavily to buy land. During most of the period between 1870 and the mid-1890s, the United States experienced mild deflation. Many farmers engaged in political protests during these years and deflation was often a subject of their protests. To understand why deflation was the subject of their protests, answer the following questions:

1. Suppose the farmer was able to grow 2700 bushels of corn on the extra land that he bought with the borrowed money. However, suppose that because of deflation the price of corn was $0.39 per bushel at the time that the loan was called, i.e., when the loan was repaid.Given the actual change in corn prices, explain why the farmer felt burdened by deflation.