Jermaine’s country is relatively small and does not have many natural resources. Nonetheless, it has enjoyed strong economic growth and has become one of the 20 wealthiest countries in the world. How is this possible?
a. Abundant natural resources are often more harmful than helpful to economic growth.
b. A lack of natural resources poses no barrier to economic growth.
c. Economic growth is unrelated to the availability of natural resources.
d. Natural resources are important, but sustained growth depends on other factors.
d. Natural resources are important, but sustained growth depends on other factors.
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In the figure above, if an excise tax is imposed that generates an efficient allocation of resources, then the amount of output will be
A) zero. B) 50 units. C) 150 units. D) 250 units.
Free trade is better than autarky for a small country
Indicate whether the statement is true or false
Under the flexible exchange rate, lowering the price of a foreign currency will
A) allow the expansion of monetary policy without causing inflation. B) decrease the foreign country's output. C) prevent a foreign price increase from causing deflation at home. D) cause a home price increase to be exported to the foreign markets. E) cause a "beggar-thy-neighbor" effect.
Assuming no change in the effective tax rate on capital, an increase in the government budget deficit will reduce the current account deficit if and only if the increase in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.