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

Ols estimator, The variance of the OLS estimator is VAR( ^B)=σ 2 /ns 2 x ...

The variance of the OLS estimator is VAR( ^B)=σ 2 /ns 2 x , where   s 2 x =£x 2 /x You're hired to estimate   and you're going to be paid according to the accuracy of your esti

Construction of an explanatory model, Q. Construction of an explanatory mod...

Q. Construction of an explanatory model? Construction of a sample:   To apply multiple regression a large sample is generally essential (ideally between 2,000 to 15,000 indivi

Factors affecting the ability of trade unions, FACTORS AFFECTING THE ABILIT...

FACTORS AFFECTING THE ABILITY OF TRADE UNIONS TO GAIN LARGER WAGE INCREASES FOR ITS MEMBERS The basic factor is elasticity of demand for the type of labour concerned.  The ela

Borrowing facilities internationally, Borrowing Facilities If a countr...

Borrowing Facilities If a country's currency is not convertible, it can borrow from countries whose currencies are convertible and use the convertible currencies to make its i

Importance of income elasticity, Importance of Income Elasticity If a ...

Importance of Income Elasticity If a country is experiencing economic growth, the income of the people will increase.  However, for those engaged in the production of goods wi

Loss at the point of equilibrium, Q. Loss at the point of equilibrium? ...

Q. Loss at the point of equilibrium? Losses: At the point of equilibrium i.e. E where MR = MC, firm produces OM amount of the output. To produce this output, firm incurs an a

Range of alternative uses of a commodity, Broader the range of other uses o...

Broader the range of other uses of a commodity, higher the price elasticity of its demand intended for the fall in price though less elastic for the increase in price. As price of

Currency swaps, Currency Swaps If the currency of one country is not c...

Currency Swaps If the currency of one country is not convertible, the central banks o f the two countries can exchange their currencies, and the country with the non-convertib

New york offers the payout, Lots of states have scratch offs with various d...

Lots of states have scratch offs with various different monetary payoffs. For example, the "$500 a week for life" in New York offers the payout and odds structure noted below.

Classification of taxes, CLASSIFICATION OF TAXES Taxes can be classifi...

CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a.     Impact of the taxes It means on whom the tax is imposed.   On the other hand, incidence of the

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