Most developing countries are in trouble whenever oil prices rise because _____.
A)they are the major exporters of oil and their export income falls
B)it causes political instability in the countries
C)it causes an increase in frictional unemployment
D)higher oil prices drain the developing countries of foreign exchange
E)it causes deflation in domestic economies.

Question

Quizplus · Accepted Answer

Developing countries are usually importers of oil and therefore have to spend more money on importing oil when the prices rise. This drains their foreign exchange reserves, making it harder for them to import other necessary goods and services. This can lead to financial difficulties and economic challenges in these countries.

Most Developing Countries Are in Trouble Whenever Oil Prices Rise