ECONOMIC DEVELOPMENT OF LATIN AMERICA STUDY GUIDE

Which Latin American country has a command economy?

• Cuba

Which country has an embargo or does not allow trade with Cuba?

• United States

Which country has the healthiest economy in South America?

• Brazil

True or False: The rate of Entrepreneurship is high in Latin America because of high unemployment and a way to get out of

poverty?

• True

What is it called when you something now and pay for it later?

• Credit

What can you invest your money in to make it grow?

• Savings Accounts, Real Estate

What is the name of Mexico’s currency?

• Peso

What restricts or stops the amount of products that can be imported?

• Embargo

What are taxes on imported goods called?

• Tariffs

The countries of Latin America use a variety of currencies, or types of money. Why is it important to have a system in place for

exchanging currencies?

• To be fair

Entrepreneurs have a major impact on the economies of Latin America. What do entrepreneurs do to help their country’s

economy?

• Create jobs

Use the chart below to answer question #12-14

Population Population density GDP per capita Mexico 115 million 52 per sq. mile $15,100 Brazil 194 million 20 per sq. mile $21,600 Tonga 119,000 430 per sq. mile $5,100 United States 304 million 86 per sq. mile $45,800

Which two countries have the highest GDP per capita?

• United States and Brazil

Based on the information on the chart, which country should have the highest standard of living?

• United States

Compare the countries above. What conclusion can you draw from the chart?

• Tonga’s low population makes it impossible to raise the GDP per capita

Brazil’s economy has experienced dramatic changes over the years. Describe Brazil’s economy today?

• Brazil’s economy is diversified and is immune to global market changes

The North American Free Trade Agreement (NAFTA) was signed in the early 1990’s. What is the purpose of NAFTA?

• Eliminate trade barriers between the US, Mexico, and Canada

Soybean farming is a major industry in Brazil. How does specializing in growing soybeans help Brazil trade with other

countries?

• Brazil can trade with other countries to get goods and services

The prices of goods and services are set by supply and demand, not by the government, in what kind of economy?

• Market Economy

Why are entrepreneurs important to Mexico’s economy?

• They invest in capital goods

• Mexico and Brazil have market economies. True or false: In a market economy, companies produce goods and consumers decide what to purchase.

• True

The citizens of a country contribute to its economy. A person in Brazil who starts a new company in

the tourism business could be called what?

• Entrepreneur

South American countries now have more diversified economies than they did in the past. Many foreign companies have made investments in the mining and

petrochemical industries. These are examples of which kind of capital?

• Investment in capital goods

The relationship between the literacy rate and standard of living in Latin America is important because

__________________________.

• The higher the standard of living, the higher the literacy rate

Many Mexican workers are employed in which industry because of NAFTA?

• Manufacturing

Which of the following sentences describes a country with a mixed economy?

• There is a combination of government regulation and privately owned businesses

A country’s distribution of resources is based on inheritance

• Traditional economy

Prices and wages are completely controlled by the government

• Command Economy

Prices and wages are solely determined by the laws of supply and demand

• Free Market

There is a combination of privately-owned industry and government control

• Mixed economy