The IMF offers loans to developing countries in times of balance of payment constraints, but the IMF also faces strong criticisms because:
A. contractionary fiscal policy and expansionary monetary policy tend to be ineffective against balance of payment constraints.
B. contractionary fiscal and monetary policies are always undesirable for any developing country.
C. it employs economists that know little about developing countries and their economic affairs.
D. the conditions tend to be procyclical, therefore worsening the recessions.
Answer: D
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When the colonies obtained independence they were no longer bound by a number of English laws, including the Navigation Acts which restricted and regulated trade. What best describes the impact of the removal of the Navigation Acts for commodities that were imported from England? a. A shift out of the supply curve and a shift back in the demand curve, which lowered prices
b. A shift out in the supply curve, which decreased the price and increased the quantity. c. A shift back in both the supply and demand curves, which decreased quantity. d. A shift back in the demand curve, which lowered both price and quantity.
The longer the time period considered, the elasticity of supply tends to: a. decrease
b. remain constant. c. increase. d. converge to zero.
A quota is
A. An elimination of trade to nurture an infant industry. B. A prohibition against trading a good. C. A limit on the quantity of a good that may be imported in a given time period. D. A tax imposed on imported goods.
With defined property rights, an externality
A) can only be corrected with government intervention. B) will not lead to a misallocation of resources. C) may be internalized with voluntary contracting, under certain circumstances. D) must lead to society producing inside its production possibilities frontier.