The aaa helped farmers raise prices of their crops by paying farmers to produce less and destroying goods that were overproduced. This action will led to increase in price.
When demand increases but supply doesn't then the price of the product increases leading to inflation. A rise in demand and a reduction in supply will result in an increase in the equilibrium price.
Consumers will now place a higher value on crop, and producers will charge a higher price to offer the goods; as a result, prices will rise for all quantities. The impact on output will depend on how big the two changes are in comparison.
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