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Economics · Oct / Nov 2023 · Paper 12 · Question 27

2281The nature of the basic economic problem

A small country whose only export is oil decides to reduce substantially the rate at which it extracts its limited oil reserves. What is the most likely reason for this decision?

  1. Ato improve the balance of payments in the following year
  2. Bto increase current government income
  3. Cto maintain future living standards
  4. Dto raise the level of employment in the oil industry

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Correct answer: C. to maintain future living standards

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