Economics 9708 · AS & A Level · 6.3

6.3 — practice question

In 2004, when world demand for oil was strong, Bolivia sought investment from foreign firms so that its oil and gas resources could be developed. What effect would this have on Bolivia’s balance of payments?

  • Adefinitely favourable, as Bolivia could increase its exports of gas and oil
  • Bdefinitely unfavourable, as the foreign companies would transfer profits out of the country
  • Cuncertain, as there would be inflows and outflows of currency
  • Dzero, as Bolivia itself would use the gas and oil produced

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