Rising American interest rates in the early 1980s were transferred directly to Latin America because two-thirds of Latin American debt carried variable interest rates.

Question

Quizplus · Accepted Answer

This statement is true. Because the majority of Latin American debt carried variable interest rates, any increase in American interest rates would be directly transferred to Latin America. This led to a debt crisis in many Latin American countries in the 1980s.

Rising American Interest Rates in the Early 1980s Were Transferred