Elizabeth Asiedu has identified a negative correlation between the share of developing countries’ economies

Choice C is the best answer because it accurately states the main idea of the text. According to the text, contrary to what some might expect, foreign investment is typically lower in developing countries whose economies are more dependent on natural-resource extraction. The text explains that high reliance on natural-resource extraction can subject a developing country to economic shocks that can destabilize the local currency and introduce economic uncertainty that tends to keep investors away. In other words, although we may think otherwise, foreign investors are less willing to invest in projects in developing countries whose economies are heavily dependent on natural-resource extraction because those economies tend to exhibit instability that investors want to avoid.

Choice A is incorrect. The text does indie that foreign investment is typically lower in developing countries whose economies are more dependent on natural-resource extraction; the text further indies that natural-resource extraction requires substantial initial investments (to acquire things like required technologies) for which there are fewer investors willing to participate at this stage than one might think. But the text does not implie the cost of these initial investments as a reason why foreign investment is less widely available than some might think. Choice B is incorrect. The text indies that greater dependence on natural-resource extraction makes a developing country less appealing to foreign investors because of associated economic instability. Rather than arguing that the goal of developing countries is to become less dependent on foreign investment, as the phrasing of choice B suggests, the text focuses only on why foreign investors become less involved with such countries, which suggests that more investment would be preferable. Choice D is incorrect. Although the text indies that natural-resource extraction requires substantial initial investments (to acquire things like required technologies) and that there are fewer likely investors willing to participate at this stage than one might think, the text does not address what investors are likely to do over time as the industry stabilizes itself.