Waltopia has gotten into debt with other countries, and cannot repay its obligations. The International Monetary Fund (IMF) has pledged to help Waltopia repayits debt. Why might the citizens of Waltopia end up regretting the involvement of the IMF in repaying their country’s debts?
What will be an ideal response?
When a state cannot make payments on its debt, the IMF can step in and provide a short-term loan to help the country restructure its debt and budget. Referred to as structural adjustment loans, the loans are conditional on specific policies that the country must adopt, often including reducing its spending. Typically, spending cuts involve social spending and food and fuel subsidies. That is, the IMF requires that the government cut back spending on public education, health services, and support for the poor (including food and fuel subsidies). As a result of these policies, the IMF is not terribly popular in developing countries when it has to step in to keep their government from going bankrupt.
You might also like to view...
When analyzing health and human services spending by the state of Texas, which of these is not true? a. Almost 60 percent of Texas health and human services funding comes from the federal government. b. Texas ranks high in comparison to other states in per person spending on health and human services. c. Health and human services is the second-largest segment of the state budget
d. Texas tends to cut health and human services first when the budget is tight. e. Texas ranked forty-first among the fifty states in per capita expenditures for welfare services and twenty-sixth in hospital services.
Which of the following is an element of prospect theory? Decision makers __________
A) work to avoid future catastrophic events B) attach their own feelings onto another actor C) asses the value of other decision makers D) use a reference point for comparison
Which of the following presidents began what is referred to as the "spoils system"?
A) Andrew Jackson B) Thomas Jefferson C) Franklin Delano Roosevelt D) Ronald Reagan E) Theodore Roosevelt
Members of the European Parliament are
a. selected by the European Commission. b. chosen by each European government. c. elected directly by the citizens. d. selected by representatives of the UN and the European Union.