California Real Estate Practice Exam

Which statement is NOT true regarding the impact of economic growth on agricultural properties?

1. Farmers' investments in equipment and storage facilities have expanded considerably since the 1940s.

2. Stables with stanchion spaces for cows are being replaced with sheds and milking facilities.

3. The average individually owned farm size has shown a steady downward trend since the 1940s.

4. The value of various buildings such as living quarters and barns is expressed in terms of value added to the property being appraised.

The correct answer is: Farmers' investments in equipment and storage facilities have expanded considerably since the 1940s.

The statement that is not true regarding the impact of economic growth on agricultural properties is that farmers' investments in equipment and storage facilities have expanded considerably since the 1940s. This statement does not reflect current trends and realities in agricultural economics. In actuality, while there have been advancements in agricultural technology and practices over the decades, the overall trend has often been toward larger farms adopting more efficient equipment, leading to fewer individual farmers operating smaller, traditional farms. Many smaller operations may struggle to compete with larger agricultural enterprises that can afford more sophisticated equipment and storage facilities, which has shifted investment focus and scale. Understanding this context allows for a clearer view of how economic growth impacts agricultural properties. The dynamics of farm size, investment in buildings, and market forces have created a complex landscape where not all farmers are expanding their investments equally, and some may even be reducing their operations. Therefore, the assertion that investments have expanded considerably contradicts trends observed in the agricultural sector since the mid-20th century.