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. have no poverty

B. always grow faster

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

D. are free from inflation

Answer: Option C

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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Practice More Economy Set 1 Questions

Question #1

The 'International Bank for Reconstruction and Development' is a part of:

A. WTO

B. World Bank Group

C. UNCTAD

D. IMF

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Correct Answer: Option B

Explanation:
IBRD is part of the World Bank Group.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a capital account transaction in the balance of payments?

A. Interest payments on external debt

B. Remittances from non-resident Indians

C. Foreign direct investment inflows

D. Export of software services

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Correct Answer: Option C

Explanation:
Foreign direct investment is a capital account transaction. Software exports, remittances and interest payments are current account items.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Pareto Efficiency' implies that:

A. Income is equally distributed

B. All markets are perfectly competitive

C. Resources can be reallocated to make someone better off without making anyone worse off

D. No reallocation can make one person better off without making someone else worse off

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Correct Answer: Option D

Explanation:
A Pareto efficient allocation is one where it is impossible to make any individual better off without making at least one individual worse off.

This question belongs to: Economy GK Economy Set 1

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