Chapter 3: The International Monetary Fund

Question 1

is an international organization that promotes global economic growth and financial stability, encourages international trade, and reduces poverty.

Answer 1

The International Monetary Fund (IMF)

Question 2

are a key determinant of the voting power in IMF decisions. Votes comprise one vote per 100,000 special drawing right (SDR) of quota plus basic votes.

Answer 2

Quotas of member countries

Question 3

are an international type of monetary reserve currency created by the IMF as a supplement to the existing money reserves of member countries

Answer 3

SDRS

Question 4

Created in 1945, the _____ is governed by and accountable to the 189 countries that make up its near-global membership.

Answer 4

INTERNATIONAL MONETARY FUND (IMF)

Question 5

_____ primary purpose is to ensure the stability of the international monetary system the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.

Answer 5

THE INTERNATIONAL MONETARY FUND

Question 6

is based in Washington, D.C. The organization is currently composed of 189 member countries, each of which has representation on the IMF’s executive board in proportion to its financial importance

Answer 6

The International Monetary Fund (IMF)

Question 7

The IMF was originally created in _____ as part of the ______ , which attempted to encourage international financial cooperation by introducing a system of convertible currencies at fixed exchange rates.

Answer 7

1945; Bretton Woods Agreement

Question 8

The IMF also acted as a ____ : Countries were not eligible for membership in the International Bank for Reconstruction and Development (IBRD)-a World Bank forerunner that the Bretton Woods agreement created in order to fund the reconstruction of Europe after World War II-unless they were members of the IMF.

Answer 8

gatekeeper

Question 9

Its mission is to promote global economic growth and financial stability, encourage international trade, and reduce poverty around the world

Answer 9

The International Monetary Fund (IMF)

Question 10

The IMF collects massive amounts of data on national economies, international trade, and the global economy in aggregate. The organization also provides regularly updated economic forecasts at the national and international levels. These forecasts, published in the World Economic Outlook, are accompanied by lengthy discussions on the effect of fiscal, monetary, and trade policies on growth prospects and financial stability.

Answer 10

Surveillance

Question 11

The IMF provides technical assistance, training, and policy advice to member countries through its capacity building programs. These programs include training in data collection and analysis, which feed into the IMF’s project of monitoring national and global economies.

Answer 11

Capacity Building

Question 12

The IMF makes loans to countries that are experiencing economic distress to prevent or mitigate financial crises. Members contribute the funds for this lending to a pool based on a quota system. In 2019, loan resources in the amount of SDR 11.4 billion (SDR 0.4 billion above target) were secured to support the IMF’s concessional lending activities into the next decade.

Answer 12

Lending

Question 13

was established in 1946 to “promote international monetary cooperation, exchange stability and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.” It carries out these functions through loans, monitoring, and technical assistance.

Answer 13

The International Monetary Fund (IMF)

Question 14

Since ___ , the IMF has provided emergency assistance to its 188 member countries after they were struck by natural disasters, and, in a great many cases, when affected by complex emergencies.

Answer 14

1962

Question 15

In ____, the IMF began to provide this type of emergency assistance to countries facing post-conflict scenarios in order to enable them to reestablish macroeconomic stability and to provide a foundation for recovery, namely in the form of long-term sustainable growth.

Answer 15

1995

Question 16

is the vehicle that the IMF uses to meet disaster-impacted countries’ financing needs. It provides funding quickly and with few requirements in instances where it is determined that a disaster or emergency situation has resulted in urgent balance-of-payments needs.

Answer 16

The Rapid Financing Instrument (RFI)

Question 17

Prior to the creation of the RFI, the IMF used a number of separate programs to address emergency needs, including the ______.

Answer 17

Emergency Natural Disaster Assistance (ENDA) program and the Emergency Post-Conflict Assistance (EPCA) program.

Question 18

In July 1944, 44 countries met in Bretton Woods, New Hampshire to hammer out a new exchange rate system and international financial architecture. Their point of reference was the gold standard and the new version was built around some of its key characteristics.

Answer 18

Bretton Woods Agreement

Question 19

After rounds of negotiation, in which the British and the American representatives had different views on what this new system should look like, the_____ triumphed

Answer 19

American delegation

Question 20

Two international agencies (the IMF and the World Bank) were set up, and a new exchange rate system called the Bretton Woods system was developed. The IMF was charged with the responsibility to monitor and oversee the new exchange rate system.

Answer 20

Bretton Woods Agreement