ECO100Y1 Lecture Notes - Money Supply
Document Summary
The pools got a certain amount of money to give to the farmers. The pools controlled the farmers" wheat in canada and canada"s wheat was. 40% of wheat production in the world; so the pools started manipulating the prices of wheat. The pools kept back a portion of the wheat because if they reduce supply, prices go up. Pools set up price of wheat to . 40 or something which was really high. But soon, the price of wheat completely falls, the pools are stuck with too much wheat, wheat market crashes. These specific real factors (like technological advances, pools, etc) which are unique can by themselves explain the wheat crash. In us, only federal government can issue money; in canada, banks did. In us, banks were controlled by states, not federal governments. In us, when people move from one state to another, they needed a new bank.
