Which statement is true of natural resources in terms of global trade or a country’s economy?...

Which statement is true of natural resources in terms of global trade or a country’s economy?

a. Steep declines in the price of oil had a negative impact on America’s oil producers.

b. The past decade has witnessed the discovery of an abundance of natural resources.

c. Petroleum is the only natural resource that affects international marketing.

d. Vast differences in natural resources result in minor shifts of wealth among countries.

Expert Solution

Q) Ans:-

Step1)

Concept

Natural resources are naturally occurring items that have the ability to generate utility to organisms. They are commodities of economic value that are used to produce goods and services required for the exhaustion of the needs and desires of humankind.

Natural resource endowments are crucial determinations of the productive capacity of an economy, its trade relations with other economies, and the fluctuations in global trade.

Step2)

Explanation

The current crisis has led to the exhaustion of oil demand in the US economy and the storage capacity has completely run out. This has caused oil prices to turn negative to a 21 year low. The oil glut has caused the prices to plummet and oil producers in the USA are facing severe challenges. Sources suggest that the price of a barrel of West Texas Intermediate reduced to a level as low as -$37.63. This indicates that producers and traders are escaping oil delivery to avoid storage costs.

Hence, the correct option would be a. Steep declines in the price of oil had a negative impact on America’s oil producers.

Rahul Sunny answered 1 year ago

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