Question

Nation A has expansive manufacturing capabilities, and, therefore, its economy focuses on selling goods to other countries. Country B buys goods from Country A but can't pay for the goods until it makes money from its own exports. It would look to _______ for assistance.

Answer 1

Answer:

The international monetary fund.

Explanation:

The international monetary fund is made up of 189 countries around the world that foster global monetary cooperation, promote high employment, secure financial stability, facilities international trade, and reduce poverty. It periodically depends on the World Bank for funding.

Countries that are having problems with balance of payment can borrow money from IMF pool of resources.

In this scenario country B is unable to pay for goods bought from country A till it makes export. There is a problem of balance of trade. The IMF can help country B make the payment by borrowing it funds.

Answer 2

Answer: International Monetary Fund (IMF)

Explanation: Nations engage in trade because they don’t produce all the goods that their inhabitants need, as a result countries often develop trade partners, even though they may have the necessary materials to produce them (comparative advantage reasons).

Country B not being able to pay for goods purchased from country A would look to the International Monetary Fund (IMF) for assistance as they can provide the necessary funds needed for balance of trade until country B can pay back from the returns from its exports.

The IMF’s mandate as a sound international financial system is to provide the needed support for vibrant international trade, facilitating the expansion and balanced growth of international trade, and also providing the opportunity for the orderly correction of countries’ balance of payments problems thereby reducing the risk of payment imbalances.