Impact of Natural Resources Practice Test

In the context of the article, resource-rich and resource-poor states are compared through governance capacity and fiscal structure. The passage states that resource-rich countries often rely on royalties and state-owned enterprises, which can reduce the bargaining link between taxation and representation, while strong institutions can counteract this risk through transparency and savings rules. Resource-poor countries, by contrast, frequently depend on broad taxation and trade competitiveness, which can strengthen accountability but also expose them to import vulnerabilities. Based on the passage, which governance model is most effective in managing natural resources?​

In the context of the article: Venezuela’s vast Orinoco oil reserves support major export earnings, but price controls, heavy reliance on the national oil company, and politicized spending increase shortages and fiscal stress; weakened checks on executive power reduce policy credibility and investment. What economic policies are associated with resource wealth in Venezuela?