Which of the following best explains why Latin American countries experienced a debt crisis in the 1980s?(1 point) Responses

Question

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.

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.

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.

Some Latin American countries were nationalizing particular industries, and they did not make money as a result of this.

Answer 1

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 encapsulates the overall economic challenges faced by many Latin American countries during that time, which were heavily reliant on external borrowing and did not have robust domestic economies to support their debts, particularly when economic conditions worsened.