Critics of the IMF contend that its lending in the ________ crisis,which was used to bail out foreign lenders,set the stage for the ________ crisis because these lenders expected to be bailed out if things went wrong and thus provided funds that were used to fuel excessive risk taking.

Question

Quizplus · Accepted Answer

The IMF's lending during the Mexican crisis in the 1990s, which was used to bail out foreign lenders, set the stage for the East Asian crisis in the late 1990s. These lenders expected to be bailed out if things went wrong, which led them to provide funds that were used to fuel excessive risk-taking in the East Asian economies. Therefore, option D (Mexican; East Asian) is the best choice.

Critics of the IMF Contend That Its Lending in the ________