Creditors Were Able to Push Such a Large Share of the Adjustment

question 38

Multiple Choice

Creditors were able to push such a large share of the adjustment costs onto the debtor governments because

• A) debtor governments were better at maintaining a common front.
• B) creditors were better able to solve the free rider problem better than debtors.
• C) smaller banks had lent less of their capital.
• D) larger banks could charge their losses to taxpayers in advanced industrial countries.
• E) the IMF threatened to make it difficult for the smaller banks to operate in the interbank market.

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Definitions:

Unauthorized Signer

An individual who signs a document or agreement without the legal authority or permission to do so.

Ratified

Confirms or approves an action, document, or agreement officially, making it valid and enforceable.

Secondary Indorsers' Liability

Refers to the legal responsibility that falls on endorsers who sign a document or contract after the primary signer, particularly in financial transactions.

Negotiates

The process of discussing something formally to reach an agreement or compromise.