G - Emerging issues in finance and financial management

Question 0

What are some aims of the IMF?

Answer 0

Regain control of the BOP by reducing demand for goods and service:

Reduce public spending and increase taxation
Necessary to curb inflation

Question 1

What are the roles of the International Monetary Fund (IMF)?

Answer 1

Roles
Oversee the global financial systems, in particular to stabilise international exchange rates
Help countries to achieve balance of payments and facilitate in the country’s development through influencing the economic policies of the country in question.
Where necessary, it offers temporary loans, from member states’ deposits, to countries facing severe financial and economic difficulties. These temporary loans are often offered with different levels of conditions or austerity measures.

Question 2

What are some possible consequences of IMF involvement to individuals and companies?

Answer 2

Austerity measures may cause increased hardship through higher unemployment, reduced purchasing power and reduced standard of living

Profits falling faster than sales due to adoption of competitive measures of increased advertising and discounts to maintain market share

May Affect customers in the middle class range more so than any other class