Russia borrowed funds from the International Monetary Fund in 1989 in exchange for agreeing to undertake certain changes. However, after receiving the funds, Russia spent the funds on other things, making the loan repayment more unlikely to occur. This situation is referred to as

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The situation described involves moral hazard, which is when one party takes on additional risk knowing that another party will bear the consequences. In this case, Russia took out a loan from the International Monetary Fund (IMF) with the understanding that they would undertake certain changes in exchange for the funds. However, once they received the money, they spent it on other things, making it more unlikely that they would be able to repay the loan. This behavior creates moral hazard because it shows that Russia is not incentivized to follow through on their promises and commitments.

Russia Borrowed Funds from the International Monetary Fund in 1989