Briefly discuss the role of International Monetary Fund loans in international efforts to address financial crises. Why have these loans been controversial?
What will be an ideal response?
POSSIBLE RESPONSE: IMF loans are often a part of rescue packages. IMF loans provide temporary financial assistance and can help restore foreign investor confidence and limit contagion. Large IMF loans have been controversial. Some argue that IMF loans have forced countries to adopt excessively contractionary policies and caused recessions. Others argue that the loans create moral hazard whereby lenders believe they can lend with little risk because they will be bailed out if the foreign country cannot repay.
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In perfectly competitive markets with identical firms, the burden of a tax is shared by consumers and producers in the short run so long as market demand is not perfectly elastic.
Answer the following statement true (T) or false (F)
A market situation in which a large number of firms produce similar but not identical products is
A) a collusive market structure. B) competitive monopoly. C) a homogeneous market. D) monopolistic competition.
The first year of the Bush administration in 2001 could be represented as a(n)
a. increase in the aggregate demand curve. b. decrease in the aggregate demand curve. c. increase in the aggregate supply curve. d. decrease in the aggregate supply curve.
Which of the following goods is nonrival in consumption and excludable?
a. Grand Canyon National Park on a rainy, cool day b. Disney World on a rainy, cool day c. a crowded public beach on a sunny, warm day d. White Mountain ski resort on a sunny, mild day