ECONOMICS (CBSE/UGC NET)

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ECONOMICS

FINANCIAL MARKETS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The IMF and World Bank have been criticised for the way they acted during the financial crisis. Much of their support for affected countries had conditions attached requiring those countries to impose ‘austerity measures’ that reduce public spending. Austerity measures generally affect the poorest people in a country the most
A
Yes, I understand this from the notes
B
No, I don’t understand this from the notes
C
No, I don’t understand this, as I have not read the notes
D
None of the above
Explanation: 

Detailed explanation-1: -The impact of IMF loans has been widely debated. Opponents of the IMF argue that the loans enable member countries to pursue reckless domestic economic policies knowing that, if needed, the IMF will bail them out. This safety net, critics charge, delays needed reforms and creates long-term dependency.

Detailed explanation-2: -The criticism about the IMF and the World Bank are that they often violate the nations’ that are beneficiary to their grants and aids’ sovereignty by including directives and conditions that may work against the economic policies of those countries.

Detailed explanation-3: -Which of the following is a common criticism against the powerful International Monetary Fund? IMF lacks any real mechanism for accountability. Which of the following is an advantage of using the gold standard? The standard contains a powerful mechanism for achieving balance-of-trade equilibrium by all countries.

Detailed explanation-4: -The crisis, in turn, paved the way for the liberalisation of the Indian economy, since one of the conditions stipulated in the World Bank and IMF loan (structural reform), required India to open itself up to participation from foreign entities in its industries, including its state-owned enterprises.

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