inhabitants vs. residents

[Wly]

English Language Tests, Intermediate level

ESL/EFL Test #151 "Traveling Down Under: How can I immigrate to Australia?", question 4

Newly arrived migrants must live in Australia for a period of two years before they are eligible to become permanent ..........

(a) nationalities
(b) populations
(c) residents
(d) inhabitants

English Language Tests, Intermediate level

ESL/EFL Test #151 "Traveling Down Under: How can I immigrate to Australia?", answer 4

Newly arrived migrants must live in Australia for a period of two years before they are eligible to become permanent residents.

Correct answer: (c) residents
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Hi,
Why the answer not "inhabitants"? Can you tell me what is the difference from "resident" and "inhabitant"

[Our Tort System]

Here you have to choose "residents" because "permanent resident" is a well known collocation.
Here's more on it: http://en.wikipedia.org/wiki/Permanent_residency
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