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Abstract

In this paper, we study the decision mechanism of prices of agricultural products and output of agricultural products, and establish simultaneous equation model between farmers' agricultural income and the total output of agricultural products, to analyse the dynamic relationship between the two. The results show that farmers' agricultural income affects output of agricultural products via price, and is also affected by output of agricultural products: the output of agricultural products is determined by the prices of agricultural products in the previous period. and if the prices of agricultural products in the previous period rise, then the total output of agricultural products in the current period increases; the prices of agricultural products are affected by output of agricultural Products and urban and rural residents' income. the urban residents' income having greater impact; the supply elasticity of agricultural products is greater than demand elasticity, therefore, the balance between price and output can not regress after being breached, needing the government to conduct macro-control.

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