What Are the Arrangements Under Which Member Nations Negotiate with the IMF

question 4

Multiple Choice

What are the arrangements under which member nations negotiate with the IMF for advance approval for future borrowings from the Fund so they will be immediately available?

• A)General Arrangements to Borrow
• B)Diminutive arrangements
• C)Standby arrangements
• D)Swap arrangements

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Definitions:

Reserve Ratio

The fraction of depositors' balances banks must hold in reserve and not lend out.

Excess Reserves

Funds that banks hold over and above the legal reserve requirement set by central banking authorities.

Government Bonds

Securities issued by a government to raise funds from the public to finance its expenditure needs.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability.