Multiple choice

With reference to international institutions such as IMF and WB, consider the following:

1.         Trade liberalisation 2.         Balancing budgets by removing price controls and state subsidies 3.         Encouraging more investment 4.         Improving governance and fighting corruption

Which of the statements given above are correct in context of structural reforms?

  1. 2 and 3 only

  2. 1, 2 and 3 only

  3. 1, 3 and 4 only

  4. 1, 2, 3 and 4
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Statement 1: It is correct. Institutions like IMF and World Bank introduced Structural reforms which included dispensing loans to troubled economies from the 1950s onwards; they attached pre-conditions to these loans. One of the five main structural reforms is trade liberalisation, i.e. lifting restrictions on imports and exports. Statement 2: It is correct. The other reforms are balancing budgets rather than the overspending and removing price controls and state subsidies. Statement 3: It is correct. To encourage more investment such as through FDI and FII flows is also one of the structural reforms. Statement 4: It is correct. IMF and World Bank were keen on improving governance and fighting corruption. 

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