Question

. You are an IMF official going to a country whose export earnings are not able to pay for imports. The government has requested a loan from the IMF. Which areas would you recommend the government to cut: (1) education, (2) salaries for officials, (3) food subsidies, and/or (4) tax rebates for exporters?

Answer 1

The correct answer to this open question is the following.

An IMF official going to a country whose export earnings are not able to pay for imports. The government has requested a loan from the IMF. The area that I would recommend the government to cut would be the salaries for officials. That is not important neither a priority for the country under harsh economic conditions.

You cannot cut education, because that is a priority for the young people. Food subsidies help the poor under difficult economic times. And in most underdeveloped countries happen to be the majority. Tax rebates for exporters is an incentive for exporters. The country needs to export more to overcome its deficit, so it would be a big mistake to stop those rebates.