8. The role of the IMF

Suppose that Mexico devalues the peso relative to the yen, the currency of its trading partner Japan.

This devaluation of the peso, all else equal, will Mexicos exports while also its imports. In response to this tactic by Mexico, Japan is likely to respond by the Yen.

Dealing with these beggar-thy-neighbor policies was not an initial goal of the International Monetary Fund (IMF).

True

False

After the collapse of the Bretton Woods System, the IMF changed its focus to lending.

One area of lending the IMF began to focus on was lending to countries facing issues arising from .