A resource-based Sovereign Wealth Funds can benefit a nation by
A) Converting a temporary resource windfall into a longer term income stream
B) Mitigating the 'Dutch disease'
C) Investing the proceeds of persistent FX buying by the Central Bank
D) Both a) and b)
E) Stabilizing the price of the natural resource

Question

Quizplus · Accepted Answer

A resource-based Sovereign Wealth Fund can benefit a nation by both converting a temporary resource windfall into a longer-term income stream and mitigating the 'Dutch disease.' This is because such funds can help to smooth the volatility of income associated with natural resource revenues while simultaneously allocating resources toward long-term investments rather than short-term consumption.

A Resource-Based Sovereign Wealth Funds Can Benefit a Nation by