True or False: Maintenance of fiscal discipline, trade liberalization, deregulat

Question

True or False:

Maintenance of fiscal discipline, trade liberalization, deregulation of the economy, etc. are examples of the set of policy prescriptions of the Washington Consensus promoted by the United States in developing countries.

The General Agreement on Tariffs and Trade (GATT) was transformed into the International Monetary Fund (IMF) in 1995. The IMF is responsible for managing international trade.

The most favored nation principle has been a bedrock of international trade negotiations. The principle holds that any preferential trading agreement reached with one country should be extended to other countries.

The theory of comparative advantage argues that all countries stand to benefit by specializing in the production of goods to which they are relatively most suited and then trading their surplus production with one another.

Explanation / Answer

true as washington consensus aims at economic stability, market expansion and trade liberalization. all the three mentioned areas also focus on that false as IMF was established in 1945 and GATT in 1947 and both are seperate and have different works false as it says that the countries are not allowed to discriminate between other countries while trading goods. true he model says that if there is difference in labour productivity in two countries then the countries benefit each other by trading the goods on which they have more comparative advantage.

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