Factors that led to worsening conditions in Mexico's 1994-1995 financial markets include
A)failure of the Mexican oil monopoly.
B)the ratification of the North American Free Trade Agreement.
C)increased uncertainty from political shocks.
D)decline in interest rates.

Question

Quizplus · Accepted Answer

The increased uncertainty from political shocks, such as the assassination of presidential candidate Luis Donaldo Colosio and the uprising of the Zapatista movement, contributed to worsening conditions in Mexico's financial markets in 1994-1995. Factors such as declining interest rates (D) might have initially encouraged borrowing and investment, but they were not the main cause of the crisis. The failure of the Mexican oil monopoly (A) and the ratification of NAFTA (B) might have had some implications for the Mexican economy, but they were not directly linked to the 1994-1995 financial crisis.

Factors That Led to Worsening Conditions in Mexico's 1994-1995 Financial