The purpose of commodity buffer stocks is
A)to moderate price fluctuations.
B)to raise commodity prices.
C)to encourage commodity substitution.
D)to guarantee national security.

Question

Quizplus · Accepted Answer

The purpose of commodity buffer stocks is to moderate (smooth out) price fluctuations in the market. By buying up excess supply during times of low prices and releasing it during times of high prices, buffer stocks can help stabilize the market and ensure a more predictable income for producers. The aim is not to raise prices or guarantee national security, although these may be secondary benefits. Commodity substitution is not directly related to buffer stocks.

The Purpose of Commodity Buffer Stocks Is