The International Monetary Fund provides loans subject to conditions known as structural adjustment policies (SAPs). What are typical examples of SAPs?

Question

Quizplus · Accepted Answer

Structural adjustment policies typically involve increased privatization and reduced government spending, as well as other measures such as currency devaluation, trade liberalization, and labor market deregulation. Option B involves increased regulation of foreign investment and exchange controls, which is not typically a component of SAPs. Option C involves increased regulation of financial capital flows, which may be a component of SAPs, but the second part of the option (reduced government spending) aligns with typical SAPs. Option D suggests increased government spending and reduced privatization, which is opposite to the typical SAPs approach.

The International Monetary Fund Provides Loans Subject to Conditions Known