Country X, a member of the IMF, needs to borrow money from the IMF. The IMF has agreed to the loan if Country X agrees to close insolvent merchant banks and lower tariffs on many goods. Which term refers to the restrictions imposed on the loan?
A) IMF hard loan details
B) World Bank pegging
C) IMF conditionality
D) BOP provisions

Question

Quizplus · Accepted Answer

IMF conditionality refers to the set of policies or conditions that the IMF requires in exchange for financial resources. The closing of insolvent banks and lowering of tariffs are examples of such conditions aimed at ensuring the borrower country implements policy reforms to restore economic stability.

Country X, a Member of the IMF, Needs to Borrow