Chapter IC, Problem 11.2CDQ

Summary Introduction

Case summary:

Country M was the poorest country in the world. Most of the population earned less than a dollar per day. Person M was their president and brought about many changes to develop the country. He mainly focused on agriculture and introduced many schemes for poor farmers. In return, there was a good yield in agriculture, the country economy increased to 7% in between 2005 and 2010.

Person M was then again re-elected as president. There was lot of difference this time in his ruling because this country was affected to a greater extent. He took control over economic policies and all the economic decision were taken on his own. This brought about many changes for the country and they lost support from other countries.

Person M refused to devalue Currency K and refused to meet Institution IF; this led the country to face financial crises. Later, in City B, they made an announcement that Country M would devalue Currency K by 40%, so Institution IF unblocked its loan program.

Characters in the case:

Country M,

Person M,

Institution IF.

To determine: The reason why Person M resisted Institution IF’s call to devalue currency K and the condition of Country M’s economy if he had lived and remained in power.