a short-term loan to shore up the value of the mexican peso would most likely be funded by
A. a foreign direct investment
B. an IDA loan
C. an IBRD loan
D. an individual broker
E. an IMF loan

Answers

Answer 1

A short-term loan that would most likely be used in this situatis called:

E. An IMF loan

What is a Short-term Loan?

A type of borrowing, typically requiring repayment within a year or less, is known as a short-term loan, while the IMF is a financial organization that offers assistance to its member countries facing balance of payment challenges, such as currency crises, which could lead to the Mexican government seeking a loan from the IMF accompanied by certain policy reforms to tackle the underlying economic issues.

Therefore, in this scenario stated above, the Mexican government would most likely request a loan from the IMF in order to stabilize the peso's value. This  loan would be accompanied with some conditions, such as policy reforms, in order to address the underlying economic issues.

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