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Why Does the International Monetary Fund (IMF)encourage Liberalization in the Face

Question 14

Multiple Choice

Why does the International Monetary Fund (IMF) encourage liberalization in the face of a financial crisis?


A) The IMF would not have the authority to loan money if it did not encourage liberalization.
B) Liberalization can only occur in conjunction with a financial crisis of sufficient size.
C) Liberalization will help reduce deficits by making the cost of goods go down domestically.
D) Liberalization will help the country generate more revenue by increasing taxes on imports.
E) Countries normally have protections against IMF goods and the IMF wants a level playing field.

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