Which of the following is not reason why resource-based economies often experience slow economic growth
A) An over-valued exchange rate
B) Macroeconomic volatility due to volatile commodity prices
C) Higher propensity for civil conflict
D) Weak institutions and their impact on growth
E) Resource extraction is not very profitable

Question

Quizplus · Accepted Answer

Resource extraction is typically seen as a lucrative industry, so it is not a reason why resource-based economies experience slow economic growth. Rather, the other options (A, B, C, and D) all relate to challenges that can hinder economic growth in these types of economies. An over-valued exchange rate can make exports more expensive and reduce competitiveness, volatile commodity prices can lead to uncertainty for businesses and investors, civil conflict can disrupt economic activity and deter foreign investment, and weak institutions can limit the effectiveness of policies and hinder economic growth.

Which of the Following Is Not Reason Why Resource-Based Economies