Question

Which of the following best states economists' understanding of the facts concerning the relationship between natural resources and economic growth?

a. some countries can be rich mostly because of their natural resources and countries without natural resources need not be poor, but can never have very high standards of living.
b. differences in natural resources have virtually no role in explaining differences in standards of living.
c. abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living.
d. a country with no or few domestic natural resources is destined to be poor

Answer 1

The relationship between natural resources and economic growth is best described by option c: abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living. Therefore, the correct option is C.

Step-by-step explanation:

The correct answer is c. abundant domestic natural resources may help make a country rich, but even countries with few natural resources can have high standards of living. While natural resources can contribute to a country's wealth, it is not the sole determinant. Factors such as culture, political stability, and economic policies also play a significant role in a country's economic growth and living standards.

For example, the United States has abundant resources but also benefits from a stable political system and effective economic policies. On the other hand, some countries with rich natural resources, like some countries in Sub-Saharan Africa, still face economic challenges due to factors such as political unrest and unequal resource distribution.