SSC Economics Sample Paper NCERT Sample Paper-3

  • question_answer
    Conditionality' of an IMF loan to a member country stands for:

    A)  Interest and repayment terms of the loan

    B)  An assessment of the credit worthiness of the borrower

    C)  Schedule of disbursement of loan instalments

    D)  The policy steps which the borrower country must take

    Correct Answer: D

    Solution :

    [d] Conditionality is typically employed by the International Monetary Fund, the World Bank or a donor country with respect to loans, debt relief and financial aid. Conditionalities may involve relatively uncontroversial requirements to enhance aid effectiveness, such as anti-corruption measures, but they may involve highly controversial ones, such as austerity or the privatization of key public services, which may provoke strong political opposition in the recipient country.

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