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

Determine the negotiate a wage increase, Mark works for Maple Feel Inc., wh...

Mark works for Maple Feel Inc., which exports maple syrup to Slovakia. Currently, he generates $60,000 a year of net revenues for the firm and his salary is $60,000 per year. Mark

Explain the point and arc elasticity of demand, Point and arc elasticity of...

Point and arc elasticity of demand The elasticity of demand is conventionally measured either at a finite point or between any two finite points, on demand curve. The elasticit

What are the different channels of monetary policy, Question 1: a. What...

Question 1: a. What are the different channels of monetary policy? b. Discuss why the channels of monetary policy are likely to change in the wake of financial liberaliz

Private cost and social cost, Why we need to distinguish between private co...

Why we need to distinguish between private cost and social cost?

Cheapening of materials and equipments, Q. Cheapening of Materials and Equi...

Q. Cheapening of Materials and Equipments? Expansion of an industry increases the demand for different kinds of materials and capital equipments. This will result in large scal

2 questions., Question 1: Martha National County Club is a golf club in an ...

Question 1: Martha National County Club is a golf club in an isolated wealthy community and accepts only females as members. There are 1,000 identical female members of the club an

Quantitative Analysis, How has quantitative analysis changed the current sc...

How has quantitative analysis changed the current scenario in the management world today? Focus must be on the business world specifically in the context of Asian Countries.

Gm04, “Managerial economics involves use of economic analysis to make busin...

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

Compettitive market, Tomato Farm is selling tomatoes in a purely competitiv...

Tomato Farm is selling tomatoes in a purely competitive market. Its output is 5000 bushels, which sell for $15 a bushel. At this level of output, the marginal cost is $15 bushel an

Calculate the equal amounts of capital and labor, The production function o...

The production function of the personal computers for DISK Company is given by Q = 10 KL where Q is the number of computers produced per day, K s the hours of machine time,

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