Despite Its Close Relationship with the Richest Country in the World

question 191

Multiple Choice

Despite its close relationship with the richest country in the world, Mexico's economy has not grown faster than the American economy. Over the same period, the Chinese economy was able to grow much faster than both the US and Mexico. Which answer best explains Mexico's slower growth.

• A)Mexico's corruption and weak financial sector make lending difficult.
• B)American firms refuse to invest in Mexico.
• C)Mexico has not yet received sufficient aid from rich countries for it to grow.
• D)Mexico's GDP per capita was originally lower than China's making it harder for Mexico to encourage economic growth.
• E)Mexico's people don't additional economic development to occur.

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Definitions:

Fiscal Policies

Government policies related to taxation and spending that aim to influence the economy.

Political Business Cycle

A theory suggesting that electoral cycles influence economic cycles, with policymakers manipulating the economy to improve re-election chances.

Fed

The Federal Reserve System, which is the central banking system of the United States, responsible for monetary policy.

Re-election

is the process by which an official, typically in a political context, wins another term in office through a voting process.