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Write a brief account on the role of the International Monetary Fund (IMF) or the World Bank in the world economy. - Leaving Cert Economics - Question e - 2010
Question e
Write a brief account on the role of the International Monetary Fund (IMF) or the World Bank in the world economy.
Worked Solution & Example Answer:Write a brief account on the role of the International Monetary Fund (IMF) or the World Bank in the world economy. - Leaving Cert Economics - Question e - 2010
Step 1
Expansion of World Trade
Answer
The International Monetary Fund (IMF) plays a significant role in promoting world trade by encouraging member countries to adopt sound economic policies. By monitoring economic and financial developments, the IMF provides valuable advice to its members, which helps in fostering a stable trading environment.
Step 2
Promote Exchange Rate Stability
Answer
The IMF is instrumental in promoting international monetary cooperation. It offers forums for consultation on international monetary problems and aims to maintain orderly exchange arrangements among countries. This helps in avoiding competitive devaluations that could disrupt trade and economic stability.
Step 3
Orderly Correction of Balance of Payments Problems
Answer
The IMF provides financial assistance to member countries facing balance of payments issues. By lending to these countries, the IMF allows them to adjust economic policies, offering temporary financing to correct underlying problems and stabilize their economies.
Step 4
Step 5
Provision of Technical Assistance and Training
Answer
When countries require assistance, the IMF provides training and technical support to strengthen their economic management. For example, the IMF played a crucial role in assisting Soviet Union countries transition from centrally planned to market-based economies.