An important factor leading up to the Mexican financial crisis of 1994-1995 was ________.
A)the failure of the Mexican oil monopoly
B)increasing loan losses at Mexican banks
C)the ratification of the North American Free Trade Agreement
D)the failure to ratify the North American Free Trade Agreement

Question

Quizplus · Accepted Answer

Increasing loan losses at Mexican banks, particularly related to loans to the real estate sector, contributed to a banking crisis in Mexico that was a major factor in the overall financial crisis. The NAFTA agreement played a role by increasing foreign investment in Mexico and contributing to an economic boom in the early 1990s, but ultimately the underlying weaknesses in the Mexican financial system led to the crisis. The failure to ratify NAFTA would not have directly caused the crisis. The failure of the Mexican oil monopoly is not directly related to the crisis.

An Important Factor Leading Up to the Mexican Financial Crisis