Chapter 3: International Financial Institution

Question 1

occurs when prices among different locations or related goods follow similar patterns over a long period of time.

Answer 1

Market integration

Question 2

A situation in which separate markets for the same product become one single market,

Answer 2

Market integration

Question 3

have deep institutional expertise in providing and catalyzing investments in sustainable development and have taken steps to align their activities with the 2030 Agenda, including by scaling- up climate finance, designing and deploying innovative Sustainable Development Goals (SDGs)-related financial instruments, and helping to crowd-in public and private resources to advance global public goods in areas such as combatting climate change and forced displacement

Answer 3

INTERNATIONAL FINANCIAL INSTITUTION

Question 4

Including multilateral, regional and national development banks with international operations, are critical development partners to achieve the

Answer 4

Sustainable Development Goals (SDGs).

Question 5

List of International Financial Institutions:

Answer 5

1. European Investment Bank (EIB)
2. Inter-American Development Bank (IDB)
3. Asian Development Bank (ADB)
4. International Fund for Agricultural Development (IFAD)

Question 6

came into being in 1958 by the Treaty of Rome with the objective of integration, balanced development and economic and social cohesion of the European Union (EU) countries. It is the EU’s financing institution and enjoys financial autonomy. All EU members subscribe to the bank’s capital. It also raises funds from external markets, and finances capital projects within the EU.

Answer 6

European Investment Bank (EIB)

Question 7

It is a regional development bank established in 1959 within the Inter- American System. The USA provided $350 million of the Bank’s initial capital of $1 billion. The bank finances projects in Latin America and the Caribbean.

Answer 7

Inter-American Development Bank (IDB)

Question 8

It is a multilateral development financial institution, set up in 1986, with headquarters in Manila.

Answer 8

Asian Development Bank (ADB)

Question 9

Forty-eight of its 67 members are developing countries. It raises funds through contributions from member-countries, bond issues in world markets (it has triple ‘A’ credit rating) and retained earnings.

Answer 9

Asian Development Bank (ADB)

Question 10

Its objective is poverty alleviation and improvement in quality of life in developing member-countries.

Answer 10

Asian Development Bank (ADB)

Question 11

____ is a founding member of the ADB.

Answer 11

India

Question 12

It is an international financial institution and a United Nations agency, established in 1974 with an initial funding of $1 billion. Its objective is to eliminate rural poverty in developing countries by providing aid for agricultural development.

Answer 12

International Fund for Agricultural Development (IFAD)

Question 13

It supports rural programs that empower women and the rural poor, by designing such programs, giving concessional long-term loans, giving grants to institutions that assist the rural poor, and partnering the government. It has invested $11.8 billion in poverty eradication projects across the world.

Answer 13

International Fund for Agricultural Development (IFAD)

Question 14

In 1982, the external debt of ____ was $91 billion and $85 billion respectively.

Answer 14

Brazil and Mexico

Question 15

Multilateral Assistance and Developing Countries: International lending agencies have had the following beneficial effects:

Answer 15

1. They help the developing countries to design policies conducive to attracting FDI.
2. They insure political risk and stimulate private capital flows to less developed
   countries.
3. They enhance the credibility of host country governments.
4. They assist in regional economic integration.
5. They bail out countries on the verge of economic collapse.
6. They assist countries to manage fiscal deficits and BOP problems (temporary and permanent).
7. They finance infrastructure and developmental activities, and co- finance projects.
8. They assist countries in opening up their economies and reducing capital controls.
9. They provide concessional loans to the least developed countries.
10. Often, they are the only source of funding for the poorest of countries.

Question 16

became an integral part of debt rescheduling activities many countries. It advocated austerity programs that included an increase in exports, fiscal discipline, and reduction in external debt, tight money policy and control of inflation.

Answer 16

IMF