Question

how did the new deal policy of loaning money to farmers help create higher prices for farm goods?
it permitted farmers to buy land, thus raising prices on crops grown there.
it permitted farmers to invest money, thus relieving them of the need to work.
it permitted farmers to produce fewer farm goods, thus raising prices.
it permitted farmers to produce more farm goods, thus raising prices.

Explanation:

New Deal farm loan policies were part of programs aimed at addressing overproduction, which had driven down farm goods prices. By providing loans, farmers were supported to reduce production (e.g., by taking land out of cultivation). Following the basic supply-demand principle, lower supply of farm goods leads to higher market prices. The other options are incorrect: buying land doesn't directly raise crop prices, investing to avoid work is not a relevant mechanism, and producing more goods would lower prices, not raise them.

Answer:

C. It permitted farmers to produce fewer farm goods, thus raising prices.