What is IMF conditionality? What are three examples of politically unpopular measures that come with IMF conditionality? Why are they necessary?
What will be an ideal response?
The ideal answer should include:
1. Define IMF conditionality.
2. Discuss three examples of unpopular conditionality measures. For instance, students might mention decreasing state spending for welfare programs, increasing unemployment, and increasing taxes.
3. Explain why these policies are necessary. Students might argue that the IMF wants to ensure that money lent to a country is not spent for politically popular but economically unprofitable purposes (such as subsidizing food), or that the IMF wants to ensure that inflation does not eat away all progress and that the economy is stable enough to attract investment.
4. Offer a concise summary and effective conclusion.
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