MCQ
upsc-p1-economy-intl-economic-institutions MCQ - Practice Questions with Answers
Solve 8 upsc-p1-economy-intl-economic-institutions questions for RAS/RPSC preparation.
Practice questions
Q1Consider the following statements about externally aided projects in India: Statement 1: A State may implement a project financed by the World Bank or the Asian Development Bank even though the Union government is normally the formal borrower or guarantor. Statement 2: Implementation of such a project by a State is equivalent to the State independently raising a sovereign external loan outside the Union framework. Select the correct answer using the code given below.
Statement 1 is correct: implementation geography and the identity of the legal borrower need not be the same. Statement 2 is incorrect because external borrowing and foreign loans are centrally managed; State projects are normally routed through Union borrowing, guarantees, on-lending, grants or budgetary arrangements.
Q2Match List I with List II: List I (Institution) A. IMF B. International Development Association C. Multilateral Investment Guarantee Agency D. WTO List II (Principal role) 1. Concessional finance and grants for the poorest countries 2. Administration of trade agreements and dispute settlement 3. Political-risk insurance and credit enhancement 4. Surveillance and balance-of-payments support Select the correct answer using the code given below.
The IMF conducts surveillance and provides balance-of-payments support; IDA gives concessional finance and grants to the poorest countries; MIGA provides political-risk insurance and credit enhancement; and the WTO administers trade agreements and dispute settlement. Thus the matching is A-4, B-1, C-3, D-2.
Q3With reference to the International Monetary Fund, consider the following statements: 1. A member's quota affects its subscription, voting power, access to IMF financing and allocation of Special Drawing Rights. 2. An Article IV consultation is an IMF surveillance process concerning macroeconomic and external-sector policies. 3. A Special Drawing Right is a currency issued by the IMF for circulation among the public. Select the correct answer using the code given below.
Statements 1 and 2 are correct. Quota is both a subscription and governance measure and influences financing access and SDR allocation. Article IV consultation belongs to IMF surveillance. Statement 3 is incorrect: an SDR is an international reserve asset and a potential claim on freely usable currencies, not money circulating among the public.
Q4Arrange the following stages of a typical World Bank project cycle in the correct chronological order: 1. Board approval 2. Project preparation 3. Completion evaluation 4. Project identification Select the correct answer using the code given below.
A typical project moves from identification to preparation and appraisal, then to negotiation and Board approval, followed by implementation and completion evaluation. Among the listed stages, the correct order is 4-2-1-3.
Q5Arrange the following developments in chronological order, from earliest to latest: 1. The World Trade Organization began functioning 2. The IMF and IBRD were designed at the Bretton Woods Conference 3. The Asian Development Bank began operations 4. The IMF Articles and IBRD Articles came into force Select the correct answer using the code given below.
The IMF and IBRD were designed at Bretton Woods in July 1944; their Articles came into force in 1945; ADB began operations in 1966; and the WTO began functioning on 1 January 1995. Hence the order is 2-4-3-1.
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6Consider the following statements about the World Bank Group: 1. In strict institutional usage, the World Bank comprises the IBRD and the IDA. 2. A country must be an IMF member before it can become an IBRD member. 3. Membership of the IDA, IFC and MIGA is independent of IBRD membership. Select the correct answer using the code given below.
7Consider the following statements regarding IMF financing: Statement 1: IMF lending is intended to assist members facing actual or potential balance-of-payments problems. Statement 2: An IMF arrangement is ordinarily a project loan tied to the construction of a particular road, port or school. Select the correct answer using the code given below.
8Consider the following statements: 1. The Asian Development Bank has both regional and non-regional members. 2. The World Trade Organization administers trade agreements and provides a forum for negotiations and dispute settlement. 3. Both the Asian Development Bank and the World Trade Organization conduct IMF-style Article IV surveillance. Select the correct answer using the code given below.