The monetary approach to balance of payments problems, often used by the IMF, relies on
A)restricting monetary policy
B)imposing domestic credit controls
C)creating a recession
D)letting interest rates increase
E)all of the above

Question

Quizplus · Accepted Answer

The monetary approach to balance of payments problems relies on a combination of restricting monetary policy, imposing domestic credit controls, creating a recession, and letting interest rates increase. All of these measures are meant to decrease the demand for imports and increase the supply of exports, thus improving the balance of payments. The IMF often uses this approach in its lending programs to countries experiencing balance of payments difficulties.

The Monetary Approach to Balance of Payments Problems, Often Used