2
QuizMultiple Choice

Cultural Diversity in Texas — Cumulative exam

Question 2 • TX-World Geography Studies

Which of the following statements about loans from the IMF and World Bank is false?

Answer
A
Corrupt leaders often embezzle funds, but countries must repay the money anyway, even after the leader is removed from office.
B
Loans never are spent in ways that benefit economic growth.
C
Loan requirements may force nations to cut spending on social programs, including health care and education.
D
Required debt payments sometimes exceed annual Gross Domestic Product.

Explanation

B is false because IMF and World Bank loans can be used for projects or policies intended to support economic growth; it is not true that they never benefit growth. The other statements describe criticisms or possible outcomes of lending: corrupt leaders may misuse borrowed funds while the country remains responsible for repayment, loan conditions can require cuts to social spending, and debt payments can sometimes be extremely large relative to a country's GDP.

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