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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The long-run rate of unemployment to which an economy always gravitates is the
A) normal rate of unemployment. B) natural rate of unemployment. C) neutral rate of unemployment. D) inflationary rate of unemployment.
All of the following are true about foreign direct investment (FDI) and portfolio investment EXCEPT
A) increases in the flow of portfolio investments increase the likelihood of financial crisis. B) both portfolio investments and FDI are the same in that they both give their holders a claim on the future output of the foreign economy. C) FDI is relatively illiquid compared to portfolio investment. D) portfolio investments have been on the decline in recent years (or decades).
A newspaper article in commenting on the local electric monopoly tells its readers that the company's dominant economic position as a monopolist allows it to produce whatever output level it desires and to set whatever price it wishes
Critically evaluate this position.
Consider the special panel case where T = 2. If some of the omitted variables, which you hope to capture in the changes analysis, in fact change over time, then the estimator on the included change regressor
A) will be unbiased only when allowing for heteroskedastic-robust standard errors. B) may still be unbiased. C) will only be unbiased in large samples. D) will always be unbiased.