The Resource Curse Is When

question 104

Multiple Choice

The resource curse is when:

• A) a nation only has an inherent comparative advantage for one resource.
• B) a nation only has a transferrable comparative advantage for one resource.
• C) the discovery of a resource in a nation causes its currency to appreciate and thus causes the nation to lose comparative advantages in other sectors.
• D) a nation has neither an inherent nor a transferrable comparative advantage for any resource.

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Definitions:

Debt-to-equity Ratio

A financial benchmark indicating the proportional use of debt and equity in the financing strategy for a company's assets.

Times Interest Earned Ratio

A financial metric assessing a company's ability to meet its interest obligations from operating earnings.

Inventory Turnover

A measure of how quickly a company sells its stock of goods in a period, calculated by dividing the cost of goods sold by the average inventory level.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by shareholders' equity.