The "Resource Trap" Theory Argues That

question 35

Multiple Choice

The "resource trap" theory argues that:

• A)countries with natural resources are less likely to be democratic.
• B)countries with natural resources are more likely to be democratic.
• C)countries with educational resources are less likely to be democratic.
• D)countries with small welfare states are less likely to be democratic.
• E)countries with large states wind up becoming less democratic.

---

Definitions:

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment within an economy.

Long-run Phillips Curve

A graphical representation showing the relationship between inflation and unemployment when inflation expectations are fully adjusted to actual inflation.

Natural Rate

The long-term unemployment rate that is observed once the effect of short-term cyclical factors has been removed, considered to be the rate of unemployment consistent with a stable rate of inflation.

Short-run Phillips Curve

A curve illustrating the inverse relationship between the rate of inflation and the rate of unemployment in an economy for a short-term period.