Which of the following statements is true about the role of the International Monetary Fund?
A) It never interfered in the monetary and fiscal conditions of its member countries.
B) It was authorized to approve currency devaluations of only up to 10 percent.
C) It required member countries to adhere to specific agreements irrespective of the amount of funds the countries borrowed.
D) It lent money under the International Bank for Reconstruction and Development (IBRD) scheme and a second scheme which is overseen by the International Development Association (IDA).
E) It helped deficit-laden countries bring down inflation rates by providing short-term foreign currency loans.

Question

Quizplus · Accepted Answer

The International Monetary Fund (IMF) provides short-term foreign currency loans to help countries bring down inflation rates. Option A is incorrect as the IMF does have a role in the monetary and fiscal conditions of its member countries. Option B is also incorrect as the IMF has approved currency devaluations of greater than 10 percent in the past. Option C is incorrect as the agreements that member countries are required to adhere to are usually specific to the amount of funds borrowed. Option D is also incorrect as the IMF provides loans under its own scheme and not the IBRD or IDA schemes.

Which of the Following Statements Is True About the Role