Describe the criticisms about decision making at the IMF and the World Bank. Which types of policies are thought to reflect bias? What types of costs are not considered? What is the fundamental question critics raise about the operations of the international governmental economic institutions?
What will be an ideal response?
Voting structures at the IMF and World Bank give developed nations, and the U.S. especially, control over decision making, making it hard to delineate whose interests are being served. For example, policies favoring free capital flows and privatization of publicly owned industries are thought to reflect the biases of industrialized countries rather than overwhelming economic consensus. Implementation and adjustment costs may be much greater in developing countries because they have higher overall levels of unemployment, less diversification in their economies, and fewer resources to develop new infrastructure or to do other spending necessary to take advantage of new opportunities. Fundamentally, critics ask whether they are fostering development and economic security or generating greater economic inequality and compounding risks to vulnerable groups.
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Central banks that are relatively free from political interference, and are thus ________ likely to be time inconsistent, generally have a ________ record of achieving low inflation
A) more, better B) more, worse C) less, better D) less, worse
The pig farm industry is perfectly competitive. Which of the following is true?
a. Since the industry is perfectly competitive, price and quantity are at the socially efficient levels. b. The competitive price is higher and quantity lower than the socially efficient point. c. The competitive price is higher and quantity higher than the socially efficient point. d. The competitive price is lower and quantity higher than the socially efficient point.