Responses
Mexico could not pay off its loans and needed help to renegotiate the terms of its loans.
Mexico could not pay off its loans and needed help to renegotiate the terms of its loans.
Because Latin American countries had relied on foreign loans and did not have strong domestic financial markets, they struggled to pay those loans when profits fell.
Because Latin American countries had relied on foreign loans and did not have strong domestic financial markets, they struggled to pay those loans when profits fell.
The World Bank and the IMF cut off Latin American businesses from international loans because they wanted them to create strong domestic financial markets.
The World Bank and the IMF cut off Latin American businesses from international loans because they wanted them to create strong domestic financial markets.
Some Latin American countries were nationalizing particular industries, and they did not make money as a result of this.
Some Latin American countries were nationalizing particular industries, and they did not make money as a result of this.
1 answer
The best explanation for why Latin American countries experienced a debt crisis in the 1980s is:
Because Latin American countries had relied on foreign loans and did not have strong domestic financial markets, they struggled to pay those loans when profits fell.
This response captures the main issue of reliance on foreign debt and the challenges posed when economic conditions deteriorated, leading to an inability to meet repayment obligations.
