The 'resource curse' hypothesis suggests that countries rich in natural resources: MCQ with Answer and Explanation

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The 'resource curse' hypothesis suggests that countries rich in natural resources:

A. may experience slower growth due to governance and economic distortions

B. always grow faster

C. are free from inflation

D. have no poverty

Answer: Option A

Solution (By JKSSB Mock Tests)

The resource curse suggests natural resource wealth may lead to slower growth due to various distortions.

This question belongs to: Economy GK Economy Set 1

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Question #1

The Marginal Standing Facility allows banks to borrow overnight from RBI:

A. against corporate bonds

B. against foreign currency

C. against approved government securities

D. without any collateral

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Correct Answer: Option C

Explanation:
MSF allows banks to borrow overnight from the RBI against approved government securities.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of economic growth models, the Solow model emphasises the role of:

A. Only capital accumulation without technology

B. Only population growth

C. Only savings rate

D. Technological progress as the key driver of long-run growth

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Correct Answer: Option D

Explanation:
The Solow-Swan neoclassical growth model shows that long-run growth in per capita income is driven primarily by exogenous technological progress.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'long-run aggregate supply curve' is:

A. U-shaped

B. vertical

C. downward sloping

D. horizontal

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Correct Answer: Option B

Explanation:
The long-run aggregate supply curve is vertical at the full employment level of output.

This question belongs to: Economy GK Economy Set 1

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