World Bank & IMF — Set 2
World Organizations · विश्व बैंक और IMF · Questions 11–20 of 50
Which arm of the World Bank Group provides political risk insurance to investors and lenders?
Correct Answer: A. MIGA
The Multilateral Investment Guarantee Agency (MIGA) offers guarantees against non-commercial risks like war or civil disturbance. This encourages foreign direct investment (FDI) in developing countries. By reducing risk, MIGA helps attract capital to regions that might otherwise be avoided.
The 'Extended Fund Facility' (EFF) is a lending program associated with which institution?
Correct Answer: C. IMF
The EFF provides assistance to countries facing serious medium-term balance of payments problems. It usually involves longer repayment periods compared to standard IMF standby arrangements. This facility supports structural reforms aimed at stabilizing the economy.
Who is the traditional head of the International Monetary Fund (IMF)?
Correct Answer: D. A European citizen
By informal agreement, the Managing Director of the IMF is usually a European, while the World Bank President is an American. This power-sharing arrangement dates back to the founding of the Bretton Woods institutions. However, there have been increasing calls for a more merit-based selection process from all regions.
The 'Global Financial Stability Report' is a semi-annual publication of which entity?
Correct Answer: A. IMF
The IMF releases this report to assess the stability of global financial markets and emerging market financing. it identifies potential risks to the international financial system. Analysts worldwide use it to gauge macroeconomic and financial vulnerabilities.
What is the primary requirement for a country to become a member of the World Bank?
Correct Answer: C. Must be a member of the IMF
Under the World Bank's articles of agreement, a country must first join the IMF to be eligible for membership in the IBRD. This ensures that the country adheres to international monetary standards before receiving development loans. Currently, most countries in the world are members of both.
The 'International Centre for Settlement of Investment Disputes' (ICSID) handles disputes between?
Correct Answer: D. Foreign investors and host states
ICSID provides facilities for the conciliation and arbitration of investment disputes. Its goal is to foster an atmosphere of mutual confidence between states and foreign investors. This legal framework is essential for promoting international investment flows.
In the context of the IMF, what does the term 'Surveillance' refer to?
Correct Answer: A. Monitoring the economic policies of member countries
IMF surveillance involves the formal monitoring of the global economy and the policies of individual member countries. The IMF typically conducts 'Article IV' consultations annually with each member. This process helps identify economic weaknesses and provides policy advice for stability.
Which of these institutions is responsible for providing loans for 'reconstruction' and 'development'?
Correct Answer: C. IBRD
The International Bank for Reconstruction and Development (IBRD) is the core of the World Bank. Its primary mission is to reduce poverty by promoting sustainable development through loans and grants. It was originally created to help rebuild nations after the destruction of world wars.
How many member countries are currently part of the World Bank and IMF (approximately)?
Correct Answer: C. 180-195
Both institutions have near-universal membership with approximately 190 member countries. Membership allows countries to participate in the global financial network and receive technical assistance. This broad participation makes them the most influential economic organizations on earth.
The 'General Arrangements to Borrow' (GAB) is a credit arrangement associated with which institution?
Correct Answer: D. IMF
The GAB is a set of standing arrangements between the IMF and a group of member countries and institutions. It allows the IMF to borrow specified amounts of currencies from these members under certain circumstances. It serves as a backstop to ensure the IMF has enough resources for large-scale lending.