Questão 558304

Text VII – questions 38 through 40

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World Bank Brazil – country brief

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1 ------------With an estimated 167 million inhabitants, Brazil has the

-----.largest population in Latin America and ranks sixth in the world. The

-----.majority live in the south-central area, which includes industrial cities

4 ---such as São Paulo, Rio de Janeiro and Belo Horizonte. 80% of the

-----.population has aided economic development but also created serious

7 ---problems for major cities.

--------------Brazil’s “miracle years” were in the late 1960s and early 1970s

-----.when double digit-annual growth rates were recorded and the structure

10 --of the economy underwent rapid change.

--------------In the 1980s, however, Brazil’s economic performance was

-----.poor in comparison with its potential. Annual Gross Domestic Product

13 --(GDP) growth only averaged 1.5 percent over the period from 1980

-----.to 1993. This reflected the economy’s inability to respond to

-----.international events in the late 1970s and the 1980s: the second oil

16 --shock; increase in international real interest rates; the Latin American

-----.external debt crisis and the ensuing cutoff of foreign credit and foreign

-----.direct investment. This lack of responsiveness reflected the largely

19 --inward-looking policy orientation that had been in place since the

-----.1960s.

-------------Economic flexibility was further impaired by provisions of the

22 --1988 Constitution, which introduced significant rigidities in budgeting

-----.and public expenditure. An outcome of these pressures was a steady

-----.rise in the rate of inflation, which reached monthly rates of 50% by the

25 --middle of 1994.

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Internet: <http://lnweb18.worldbank.org/Exter…/ abe36259ca656c4985256914005207e3?OpenDocumen> (with adaptations).

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With the help of text VII, judge the following items.

After the latest Afghanistan war, the world has been facing the greatest oil shock which has never been experienced before.