The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4

-Which of the following statements concerning the International Monetary Fund is true?
A)The IMF was created to help finance economic development in poor countries.
B)One of the principal aims of the IMF is to discourage international trade and encourage countries to become self-sufficient.
C)The IMF lends money to countries experiencing large balance-of-payments surpluses.
D)When the IMF lends currencies, it always insists on the borrowing country taking action to reduce its balance-of-payments surplus.
E)The IMF obtains funds from annual membership fees charged to member countries.

Question

The figure below shows the demand (D) and supply (S) curves of cocoa in the U.S.Figure 21.4
 
-Which of the following statements concerning the International Monetary Fund is true?
A)The IMF was created to help finance economic development in poor countries. 
B)One of the principal aims of the IMF is to discourage international trade and encourage countries to become self-sufficient. 
C)The IMF lends money to countries experiencing large balance-of-payments surpluses. 
D)When the IMF lends currencies, it always insists on the borrowing country taking action to reduce its balance-of-payments surplus. 
E)The IMF obtains funds from annual membership fees charged to member countries.

Quizplus · Accepted Answer

The statement concerning the International Monetary Fund that is true is that the IMF obtains funds from annual membership fees charged to member countries. Option A is false because the IMF was created for the purpose of maintaining exchange rate stability, facilitating the balanced growth of international trade, and providing resources to help members in need of financing. Option B is false because the IMF actually encourages international trade and discourages countries from becoming overly self-sufficient. Option C is false because the IMF lends money to countries experiencing balance-of-payments deficits rather than surpluses. Option D is false because when the IMF lends currencies, it typically requires the borrowing country to take measures to reduce its balance-of-payments deficit, not its surplus.

The Figure Below Shows the Demand (D) and Supply (S)