Question 1 (9 marks)

(a) The following shows a newspaper excerpt in the economy of Toughtimes.

Bumper Crops Spell Disaster for Farmers

Due to ideal rainfall and good weather conditions, farmers in Toughtimes are expecting their biggest harvest in many years. "There's no question that this giant crop is a real disaster," said John Farmer, the director of Toughtimes Farm Federation. No farmer knows how they will survive this disaster, he added. The Toughtimes Farm Federation is lobbying the government to provide price support programs for this year's crops.

Briefly explain why a bumper crop may result in a disaster for farmers of Toughtimes? What is the reason for asking the government to provide price support programs? What are the advantages and disadvantages of price support programs? Explain using appropriate diagrams.

(b) What are the long-term determinants of economic growth and how can the government influence economic growth.