IMF conditionality would usually lead to:
A) an increase in AD.
B) a decrease in AD.
C) a higher price level (P).
D) higher real GDP (Y).
E) a looser fiscal policy.

Question

Quizplus · Accepted Answer

IMF conditionality often involves austerity measures, which typically lead to a decrease in aggregate demand (AD) as governments cut spending and/or increase taxes to meet the conditions set by the IMF.

IMF Conditionality Would Usually Lead To