IMF, World Bank Group and the Bretton Woods System

Attempt the quiz above first, then review every question with its correct answer and a short explanation below.

1. Q1.The headquarters of the International Monetary Fund (IMF) is in:

   • A.Geneva
   • B.New York
   • C.Washington, D.C.✓ Correct Answer
   • D.London

   Explanation: Both the IMF and the World Bank have their headquarters in Washington, D.C.

2. Q2.The main role of the IMF is to:

   • A.fund long-term infrastructure projects only
   • B.regulate world trade disputes
   • C.promote international monetary cooperation and help countries facing balance of payments problems✓ Correct Answer
   • D.issue a common world currency

   Explanation: The IMF monitors the global economy and gives short-term financial support; trade disputes belong to the WTO.

3. Q3.The World Bank mainly provides:

   • A.long-term loans and grants for development and poverty reduction✓ Correct Answer
   • B.short-term loans for balance of payments only
   • C.a global trade court
   • D.a world currency

   Explanation: The World Bank finances development projects, while the IMF handles short-term macroeconomic stability.

4. Q4.The World Economic Outlook report is published by the:

   • A.World Bank
   • B.WTO
   • C.UNDP
   • D.IMF✓ Correct Answer

   Explanation: The IMF publishes the World Economic Outlook twice a year.

5. Q5.The Logistics Performance Index is published by the:

   • A.IMF
   • B.WEF
   • C.World Bank✓ Correct Answer
   • D.UNCTAD

   Explanation: The World Bank ranks countries on trade logistics through the LPI.

6. Q6.The Bretton Woods Conference of 1944 was held in which country?

   • A.the United Kingdom
   • B.the United States✓ Correct Answer
   • C.Switzerland
   • D.France

   Explanation: It was held at Bretton Woods, New Hampshire, USA.

7. Q7.Which currency was added to the IMF's Special Drawing Rights (SDR) basket in October 2016?

   • A.the Chinese renminbi (yuan)✓ Correct Answer
   • B.the Indian rupee
   • C.the Russian rouble
   • D.the Brazilian real

   Explanation: The SDR basket includes the US dollar, euro, yuan, yen and pound sterling.

8. Q8.A member country's quota in the IMF determines its:

   • A.only its trade tariffs
   • B.only its population
   • C.only its military strength
   • D.financial contribution, voting power and access to IMF financing✓ Correct Answer

   Explanation: Quotas are broadly based on the size of a country's economy.

9. Q9.Which country holds the largest quota and voting share in the IMF?

   • A.the United States✓ Correct Answer
   • B.China
   • C.Japan
   • D.Germany

   Explanation: The US has the largest share and effectively holds a veto on major decisions needing an 85 per cent majority.

10. Q10.Under the original Bretton Woods system, member currencies were pegged to the:

    • A.the British pound only
    • B.US dollar, which was convertible into gold✓ Correct Answer
    • C.a basket of agricultural goods
    • D.the Indian rupee

    Explanation: The dollar was fixed at $35 per ounce of gold and other currencies were fixed to the dollar.

11. Q11.The Bretton Woods fixed exchange rate system effectively collapsed in:

    • A.1947
    • B.1960
    • C.1971✓ Correct Answer
    • D.1991

    Explanation: In August 1971 the US suspended the convertibility of the dollar into gold.

12. Q12.In 1991 India raised foreign exchange during its balance of payments crisis partly by:

    • A.selling the railway network
    • B.imposing a wealth tax
    • C.pledging gold and borrowing from the IMF✓ Correct Answer
    • D.printing foreign currency

    Explanation: India pledged gold and took IMF loans, accepting conditions that included reforms.

13. Q13.The International Development Association (IDA), the soft-loan arm of the World Bank, was set up in:

    • A.1944
    • B.1956
    • C.1988
    • D.1960✓ Correct Answer

    Explanation: IDA offers concessional credit to the poorest countries.

14. Q14.The International Finance Corporation (IFC) was established in:

    • A.1944
    • B.1956✓ Correct Answer
    • C.1960
    • D.1988

    Explanation: IFC lends to the private sector in developing countries.

15. Q15.The International Centre for Settlement of Investment Disputes (ICSID) was set up in:

    • A.1945
    • B.1966✓ Correct Answer
    • C.1956
    • D.1988

    Explanation: ICSID, part of the World Bank Group, provides facilities for settling investment disputes.

16. Q16.By long-standing convention, the head of the World Bank has been a national of:

    • A.the United States✓ Correct Answer
    • B.China
    • C.India
    • D.Germany

    Explanation: By an informal understanding the World Bank president is American and the IMF Managing Director is European.

17. Q17.Who coined the term "Washington Consensus" in 1989?

    • A.Joseph Stiglitz
    • B.John Maynard Keynes
    • C.Milton Friedman
    • D.John Williamson✓ Correct Answer

    Explanation: Williamson listed ten policy reforms favoured by Washington-based institutions such as the IMF and World Bank.

18. Q18.A Stand-By Arrangement (SBA) is an IMF lending instrument used mainly to help countries with:

    • A.short-term balance of payments problems✓ Correct Answer
    • B.long-term poverty reduction only
    • C.agricultural development only
    • D.disaster relief only

    Explanation: SBAs provide financing with conditions to address temporary payment difficulties.

19. Q19.The Human Capital Index was launched in 2018 by the:

    • A.IMF
    • B.World Bank✓ Correct Answer
    • C.UNDP
    • D.World Economic Forum

    Explanation: The World Bank's Human Capital Index measures how much human capital a child born today can expect to attain.

20. Q20.Special Drawing Rights (SDRs) were created by the IMF in:

    • A.1944
    • B.1956
    • C.1971
    • D.1969✓ Correct Answer

    Explanation: SDRs were created in 1969 to supplement members' foreign exchange reserves.