The IMF

Question 1

What were the original functions of the IMF?

Answer 1

1. Oversee the rules on international monetary relations that had been agreed during the Bretton Woods conference
2. To act as a source of assistance for members attempting to maintain the par value of their currencies in the face of downward market pressure

Question 2

How does the Executive Board act?

Answer 2

The Executive Board, composed of 12 people, usually acts through consensus as opposed to formal vote

Question 3

What event gave the IMF its new purpose?

Answer 3

The 1973 Petrol Crisis that created huge balance of payment problems especially for countries that didn’t export oil

Question 4

What is the IMF’s general new function?

Answer 4

balance of payment difficulties in developing countries and transitioning economies, regardless of their exchange rates

Question 5

What are the 3 new functions of the IMF?

Answer 5

1. acts as a kind of credit union - one on which only a subset of members is now like to draw
2. monitors the macroeconomic policies of its members and increasing numbers of financial sector microeconomic policies
3. advisory and technical assistance services - directed at the emerging market, transitioning economies and developing nations