Objectives of imf, Managerial Economics

Assignment Help:

Objectives of IMF

To achieve these objectives, the following conditions would have to be fulfilled: -

i.            Countries should not impose restrictions in their trade with each other.  This should encourage the growth of world trade and lead to full convertibility of currencies.

ii.           Countries should adopt the peg system of exchange rates, in which each country quotes the exchange rate of its currency in gold and thus the exchange rates between currencies can be determined.  The quoted exchanged rate is allowed to fluctuate to within 1% up and down, and the country can devalue or revalue its currency by up to 10%.  This was meant to stabilize exchange rates between currencies.

iii.         Each member state of the I.M.F should contribute to a fund to enable the I.M.F to give short-term assistance to countries having balance of payments problems. The quota contribution of the member state depends on the size of its G.D.P and its share of world trade. The member state contributed 25% of its quota in gold or convertible currency and the remaining 75% in its own currency.

iv.         A member state in balance of payments problems can borrow from the I.M.F on a short-term basis.  25% of the country's quota contribution is automatically available to it as stand-by credits.  Beyond this the country can borrow on terms dictated by the I. M. F. the country borrows by purchasing gold or convertible currency using it own currency.  The country's borrowing facility expires when the I.M.F. holds the country's currency twice the value of its quota contribution.  In paying back to the I.M.F. the country will repurchase back its currency using  gold or  convertible currency until the I.M.F holds 75% of the country's quota contribution in the country's currency.

v.          The I.M.F. reserves the right to dictate to the country borrowing from it how to govern its economy.


Related Discussions:- Objectives of imf

Equilibria than continuous pricing, Two firms are engaged in Bertrand compe...

Two firms are engaged in Bertrand competition. Both firms have a stable marginal cost of €7. Presently, every firm is allocated half the market. There are 10,000 people in the popu

Determine the law of demand curve, Determine the law of Demand Curve Th...

Determine the law of Demand Curve The law of demand can also be presented through a curve known as demand curve. Demand curve is a locus of points showing numerous alterative p

Calculate maximize total revenue, A city has two newspapers. Demand for eit...

A city has two newspapers. Demand for either paper depends on its own price and the price of its rival. Demand functions for paper A & B respectively, measured in tens of thousands

#sales maximisation theory, how realistic is the sales maximization model f...

how realistic is the sales maximization model from experience with business objectives as pursued by Zimbabwean firms

Coefficient on education, Let Consider the following (familiar) equation wh...

Let Consider the following (familiar) equation which estimates the number of hours of sleep / year  that someone gets as a function of hours worked / year (total work), education (

Game theory, In a one-shot game, if you advertise and your rival advertises...

In a one-shot game, if you advertise and your rival advertises, you will each earn RM5 million in profits. If neither of you advertises, your rival will make RM4 million and you w

Elasticity of price expectation, in the context of an environment of busine...

in the context of an environment of business,state briefly the implication of (1) Ee>1.....(2)Ee=1......(3)Ee=0.......(4)Ee

Homework, 1. What does a MNC have to consider that a domestic company does ...

1. What does a MNC have to consider that a domestic company does not, and how does this impact capital budgeting? in addition to the complications encountered in doing a capital bu

Qs = 100+2p, howw much should the firm produce to maximize its profits

howw much should the firm produce to maximize its profits

The central bank, The Central Bank These are usually owned and operate...

The Central Bank These are usually owned and operated by governments and their functions are: i.      Government's banker :  Government's need to hold their funds in an ac

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd