UPSC General Studies Sample Paper General Studies Sample Paper-8

  • question_answer
    Consider the following statements related to International Monetary Fund [IMF).
    1. Every IMF member is required to subscribe to the IMF, an amount equal to its quota.
    2. The quota of a member is largely determined by its economic conditions relative to other members.
    3. An amount, not exceeding 25% of the quota is to be paid in reserve assets, the balance in member's own currency.
    4. IMF's main function is to stabilise exchange.
    Which of the statements given above are correct?

    A)  1, 2 and 4        

    B)         2 and 3             

    C)  1, 3 and 4                    

    D)  All of these

    Correct Answer: D

    Solution :

    [d] The capital resources of the IMF comprise Special Drawing Rights (SDRs) and currencies that members pay under quotas calculated for them. Member countries are given borrowing or drawing rights with the fund which they can use, together with their own nationally held international reserves, to finance the balance of payment deficits. Other functions of IMF's are to promote international monetary cooperation to ensure balanced international trade, exchange rate stability.

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