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You Would Expect Less Fluctuation in the Percentage of Government

Question 2

Multiple Choice

You would expect less fluctuation in the percentage of government purchases to GDP of nonoil-based Arab economies relative to that of oil-based Arab economies. Why is that?


A) Oil-based Arab countries change their government expenditure plans dramatically each year.
B) Governments in nonoil-based Arab economies know how to manage resources better.
C) Government purchases in oil-based Arab economies are financed by receipts of oil revenues. Therefore, they fluctuate according to oil prices.
D) All of the above.

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