Which of the following are two ways in which Cuba has recently reformed its economy?

• A. Allowing private small businesses and expanding foreign investment opportunities
• B. Nationalizing all agricultural land and banning foreign currency
• C. Eliminating all state-owned enterprises and adopting a free-market currency system
• D. Increasing government subsidies and restricting tourism

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the context of economic reforms in Cuba, which historically had a centrally planned economy with significant state control over businesses and foreign investment.
2. Step 2: Identify common reform strategies in transitioning economies, such as allowing private small businesses to operate and expanding opportunities for foreign investment to stimulate growth.
3. Step 3: Evaluate each option by comparing it to known recent reforms in Cuba, noting that nationalizing all agricultural land or banning foreign currency contradicts moves toward market liberalization.
4. Step 4: Recognize that eliminating all state-owned enterprises and adopting a free-market currency system is a more radical reform than Cuba has implemented recently.
5. Step 5: Conclude that the reforms involving allowing private small businesses and expanding foreign investment opportunities align with Cuba's gradual economic opening and modernization efforts.