Q: Types of inflation and unemployment in Venezuela?
A: Types of inflation is hyperinflation and unemployment is involuntary employment.
Q: What is hyperinflation, and how has it affected Venezuela?
A: Hyperinflation occurs when inflation exceeds 50% per month, causing a rapid loss of currency
value. In Venezuela, hyperinflation has made basic goods unaffordable and eroded savings, forcing
many citizens into extreme poverty.
Q: What are the primary causes of hyperinflation in Venezuela?
A: The key causes include political instability, mismanagement, and destructive policies like capital
controls and subsidized exchange rates.
Q: How did Hugo Chávez's and Nicolás Maduro's policies impact Venezuela's economy?
A: Chávez’s socialist agenda and Maduro’s authoritarian measures weakened democratic institutions,
suppressed opposition, and implemented harmful microeconomic policies, worsening economic
instability.
Q: How did Nicolás Maduro's policies exacerbate Venezuela's political and economic crisis?
A: Maduro further suppressed opposition, undermined judicial independence, manipulated elections,
and continued harmful economic policies, worsening hyperinflation and political instability.
Q: What is involuntary unemployment, and how has it affected Venezuela?
A: Involuntary unemployment occurs when individuals ready to work but cannot find jobs due to
economic downturns. In Venezuela, nearly half the population faces unemployment or
underemployment due to the prolonged economic crisis.
Q: How has the industrial sector been affected by the economic crisis in Venezuela?
A: In 2017, manufacturers operated at only 34.4% of production capacity, a significant drop from the
previous year, highlighting the collapse of the industrial sector.
Q: How have multinational companies like Ford Motor Co. been affected by Venezuela's crisis?
A: Ford has struggled to keep assembly lines running due to economic instability and lack of inputs,
leading to furloughs for nearly 600 of its 900 workers and buyout offers for remaining employees.
Q: How has Venezuela's aviation industry been impacted by the economic crisis?
A: Since 2015, more than 14 airlines, including American Airlines, ceased operations in Venezuela
due to safety and economic concerns, leaving limited options for international travel.
Q: Why did American Airlines stop flying to Venezuela?
A: The Allied Pilots Association union, representing 15,000 pilots, advised its members not to fly to
Venezuela due to safety concerns.
Q1: Why is Venezuela heavily reliant on oil for its economy?
A1: Venezuela has the largest oil reserves in the world, and oil accounts for around 95% of its export
revenue. The economy has historically depended on oil exports for income.
Q2: How did oil prices contribute to Venezuela’s economic crisis?
A2: When oil prices fell sharply from $100 to $40 per barrel in 2014, Venezuela’s economy suffered
because it relied too much on oil revenue. The government was unprepared for this drop and had no
savings to support the economy.
Q3: What happened to Venezuela’s oil production?
A3: Venezuela’s oil production dropped from 3.5 million barrels per day in the late 1990s to just over
1 million barrels per day in recent years due to hyperinflation and economic mismanagement.
Q4: How did Venezuela respond to its economic problems?
A4: Instead of reducing spending, the government printed more money to fund its budget. This caused
hyperinflation, further devaluing the currency.
Q5: What was done to address the currency crisis?
A5: The government devalued the currency by 95% and introduced a new currency called the
“sovereign bolívar,” replacing the old “strong bolívar.”
Q6: What is an example of how hyperinflation affected daily life in Venezuela?
A6: Due to hyperinflation, buying 2.4 kg of chicken required 14.6 million old bolívars, equivalent to
just $2.22.
Q7: How did Venezuela’s debt worsen the crisis?
A7: The government had accumulated over $100 billion in debt during the oil boom. When oil
revenue fell, it couldn’t repay the debt and eventually defaulted.
Q8: What was the impact of printing more money?
A8: Printing more money led to hyperinflation, making the currency almost worthless and drastically
reducing the population's purchasing power.
