In 1950,Brazil's Economy Was Roughly the Same Size as Nicaragua's

question 131

Multiple Choice

In 1950,Brazil's economy was roughly the same size as Nicaragua's.Today,Brazil's economy is almost five times as large as Nicaragua's.Which of the following most likely explains this difference based on the main drivers of economic growth discussed in the textbook?

• A) Nicaragua was too reliant on foreign aid,whereas Brazil was far more economically independent.
• B) Brazil greatly limited international trade,whereas Nicaragua opened its borders to imports and exports.
• C) Brazil supported institutions like property rights,which tend to foster growth,whereas Nicaragua did not.
• D) Brazil's economy was largely agricultural,whereas Nicaragua's was industrial.
• E) Nicaragua had excessively high tax rates,but Brazil kept its taxes low and competitive.

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Definitions:

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