The International Monetary Fund (IMF) was created in 1945.The International Monetary Fund (IMF) is an organization of 189 countries. This set of 10 questions is based on the International Monetary Fund. This set has some tough and easy questions. We have given explanation of the questions for the convenience of the students. We are optimistic that this set will be very helpful in the success of all the aspirants preparing for competitive examinations.
1. Which of the following statement is not true about the International Monetary Fund?
(a) IMF was established along with the word bank
(b) IMF is the result of the Bretton Woods conference
(c) Christine Lagarde is the current Chief Executive Officer of the IMF
(d) Currently 193 countries are the members of the IMF
Explanation: The International Monetary Fund (IMF) was created in 1945.The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
2. When was IMF established?
(a) Dec. 27,1945
(b) Jan. 30, 1947
(c) Jan.1, 1946
(d) Sept. 24, 1947
Explanation: The IMF was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. Its formation take place on Dec. 27, 1945.
3. Which of the following statement is NOT correct regarding the membership of the IMF?
(a) Currently its membership is 189
(b) All "member countries" of the IMF are members of the United Nations
(c) All member countries of the IMF are not sovereign states
(d) Nauru is the latest member of the IMF
Explanation: All member countries of the IMF are not sovereign states therefore all "member countries" of the IMF are not members of the United Nations.
4. The value of Special Drawing Right (SDR) is determined by the basket of ......currencies.
Explanation: The value of Special Drawing Right (SDR) is determined by the basket of 5 currencies. The currencies are, US Dollar, Japanese Yen, British Pound, Chinese Yuan and Euro.
5. Which of the following currency has largest weightage in the determination of the value of the SDR?
(a) Japanese Yen
(c) US Dollar
(d) British Pound
Explanation: The IMF decided that the Renminbi (Chinese yuan) would be added to the SDR basket since October 1, 2016. Since then SDR basket consists of the following five currencies: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese yuan) 10.92%, Japanese yen 8.33%, British pound 8.09%.
6. Which of the following is not the objective of the IMF?
(a) To promote international monetary cooperation
(b) To ensure balanced international trade
(c) To ensure exchange rate stability
(d) To provide loan to private sectors
Explanation: Allotment of the loan to the private sector is not covered under the objectives of the IMF. International Finance Corporation is responsible to provide loan to private sectors.
7. Which of the following statement is NOT correct about the quota at the IMF?
(a) Voting power in the IMF is based on a quota system
(b) USA has highest quota in the IMF
(c) Germany has third highest quota in the IMF
(d) Indian quota in the IMF stands at 2.79% of the total quotal quota
Explanation: China has third highest quota in the IMF. At present Chinese share in the IMF quota is 6.49%. Germany is at the fourth position having quota of 5.67%.
8. If the Balance of Payment of a country is adverse, then which institution will help that country?
(a) World Bank
(b) World Trade Organization
(c) International Monetary Fund
(d) Asian Development Bank
Explanation: The International Monetary Fund helps in correcting the Balance of Payment of the member countries. Its another goal is to ensure exchange rate stability.
9. Which of the following currency is not included in the calculation of SDR value?
(d) Pound sterling
Explanation: In determining the IMF basket, rupee's value is not included. Since October 1, 2016 SDR basket consists of the following five currencies: U.S. dollar, Euro, Renminbi (Chinese Yuan), Japanese Yen and British Pound.
10. Which of the following is known as the Paper Gold?
(a) US Dollar
(c) Demand draft
(d) Special Drawing Right
Explanation: Special Drawing Right is known as the Paper Gold. The value of the SDR is based on a basket of key international currencies reviewed by IMF every five years. SDR was introduced in the 1969 by the IMF to solve the problem of International liquidity.