Question 1

GATT came into existence in ----------------

Accepted Answer

C

Question 2

SDRs scheme was initiated in -------------------

Accepted Answer

C

Question 3

India is a member of -------------

Accepted Answer

India is a member of the Asian Development Bank (ADB), the International Monetary Fund (IMF), and the International Bank for Reconstruction and Development (IBRD), making all the given options correct.

Question 4

Regional member of the Asian Development Bank is

Accepted Answer

India is a regional member of the Asian Development Bank (ADB), which primarily includes countries from the Asia and Pacific region. The UK, Brazil, and South Africa are not part of this region and thus are not regional members of the ADB.

Question 5

GATT was changed to ---------------

Accepted Answer

GATT (General Agreement on Tariffs and Trade) was transformed into the WTO (World Trade Organization) in 1995 to provide a broader and more robust framework for international trade.

Question 6

IMF started its functioning from

Accepted Answer

The International Monetary Fund (IMF) officially started its operations on March 1, 1947. This was after its initial conceptualization during the Bretton Woods Conference in July 1944, where member countries agreed on a framework for economic cooperation aimed at ensuring a stable and prosperous global economy.

Question 7

Which are known as Bretton Wood Twins?

Accepted Answer

The Bretton Woods Twins refer to the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which is the main component of the World Bank Group. These institutions were established as part of the Bretton Woods Agreement in 1944 to help rebuild the international economy after World War II.

Question 8

The headquarter of world Bank is at ------------------

Accepted Answer

The World Bank's headquarters is located in Washington D.C., United States. This location serves as the central hub for its operations and administration.

Question 9

The equilibrium exchange rate is determined by ---------------

Accepted Answer

The equilibrium exchange rate in foreign exchange markets is determined by the intersection of the demand and supply curves for currencies. This reflects the price at which the quantity of currency demanded equals the quantity supplied.

Question 10

Determining the exchange rate at a higher level than prevailing in the foreign exchange market is known as ------------

Accepted Answer

Pegging up refers to setting the exchange rate of a currency at a higher level than what would naturally occur in the foreign exchange market.

Question 11

FEMA is known as -------------

Accepted Answer

FEMA is known as FEMA 1999, which stands for the Foreign Exchange Management Act of 1999. It was enacted to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.

Question 12

According to PPP theory the exchange rate between two currencies are determined by their ------------

Accepted Answer

The Purchasing Power Parity (PPP) theory states that the exchange rate between two currencies is determined by their relative price levels. This theory suggests that in the long run, exchange rates should adjust so that an identical good in two different countries has the same price when expressed in the same currency.

Question 13

In the exchange rate determination PPP theory considers --------

Accepted Answer

The Purchasing Power Parity (PPP) theory considers inflation rates as the primary factor in determining exchange rates between currencies. It suggests that currencies will adjust to equalize the price of a basket of goods across different countries, taking into account the inflation rates.

Question 14

The rate at which one currency is exchanged for another is known as ------------

Accepted Answer

The exchange rate is the rate at which one currency is exchanged for another, representing the value of one currency in terms of another currency.

Question 15

The objective of IDA is

Accepted Answer

The objective of the International Development Association (IDA) is to improve living conditions by providing loans and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.

Question 16

Smithsonian Agreement was signed in the year ---------

Accepted Answer

The Smithsonian Agreement was signed in 1971 as a response to the collapse of the Bretton Woods system, aiming to realign the world's main currencies and stabilize the global financial system.

Question 17

The objective of IMF is

Accepted Answer

The primary objective of the International Monetary Fund (IMF) is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries to transact with each other.

Question 18

SDRs are also known as -----------

Accepted Answer

SDRs (Special Drawing Rights) are referred to as "paper gold" because they are an international type of monetary reserve currency created by the International Monetary Fund (IMF) to supplement its member countries' official reserves, thus serving a similar purpose to gold in the global financial system, but in a form that is not physical.

Question 19

The official decrease in the value of a currency is known as ---------

Accepted Answer

Devaluation refers to the deliberate downward adjustment of a country's currency value relative to another currency, group of currencies, or standard. It is a decision made by the government or monetary authority of the country.

Question 20

Globalised economics prefer------------

Accepted Answer

Globalised economics prefer a flexible exchange rate system because it allows exchange rates to be determined by the market, facilitating adjustments to changing economic conditions more smoothly than fixed or pegged systems.

Quiz 2: International Economic Organizations and Concepts