An Argument That Supports the View That the World Needs

question 76

Multiple Choice

An argument that supports the view that the world needs an international lender of last resort such as the IMF is that

• A) central banks in emerging-market countries lack credibility as inflation fighters.
• B) an international lender of last resort creates a safety net that protects bank depositors.
• C) the IMF is slow to lend, which ultimately reduces the amount that must be borrowed.
• D) the IMF imposes requirements that borrowing countries must enact microeconomic policies to reform their financial systems.

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Definitions:

Insurance Policy

A contract that provides financial protection against losses or damages, defining the terms, coverage, premiums, and conditions under which the insurer will compensate the insured.

Accounting Equation

The fundamental principle of finance stating that assets equal liabilities plus equity.

Paid Cash

The act of settling a transaction, or an obligation or debt, with the use of cash money instead of other forms of payment like credit.

Received Payment

The money received by an individual or a company for goods delivered or services rendered.