A typical IMF stabilization package involves
A)erecting barriers against foreign investment.
B)overvaluing the exchange rate.
C)liberalization of exchange controls.
D) a reduction in interest rates.
E) all of the above.

Question

Quizplus · Accepted Answer

IMF stabilization packages typically involve liberalization of exchange controls, which means removing or relaxing restrictions on the buying and selling of foreign currencies. This can include allowing free convertibility of a country's currency on international markets and reducing restrictions on capital flows. Erecting barriers against foreign investment or overvaluing the exchange rate are not typically part of IMF stabilization packages. Reducing interest rates may be a part of an IMF program, but it is not always included.

A Typical IMF Stabilization Package Involves