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With reference to International Monetary Fund (IMF), consider the following statements:
1. The International Monetary Fund (IMF) is one of the biggest moneylenders for any country in the world.
2. Its member states have equal voting rights.
Which of the statements given above is/are correct?
1. The International Monetary Fund (IMF) is one of the biggest moneylenders for any country in the world.
2. Its member states have equal voting rights.
Which of the statements given above is/are correct?
- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
With reference to International Monetary Fund (IMF), consider the foll...
- The International Monetary Fund (IMF) is one of the biggest moneylenders for any country in the world.
- Its 189 member states (as on 12 April 2016) do not have equal voting rights. The vote of each country is weighed by how much money it has contributed to the IMF.
- More than 40% of the voting power in the IMF is in the hands of only seven countries (US, Japan, Germany, France, UK, Italy and Canada). The remaining 182 countries have very little say in how these international organisations take Decisions.
Most Upvoted Answer
With reference to International Monetary Fund (IMF), consider the foll...
Understanding the IMF Statements
To evaluate the correctness of the statements regarding the International Monetary Fund (IMF), let's analyze each one.
Statement 1: The IMF is one of the biggest moneylenders for any country.
- This statement is correct.
- The IMF provides financial assistance to countries facing balance of payments problems, making it one of the largest sources of financial support globally.
- It offers loans, which are often accompanied by conditions aimed at helping countries stabilize their economies.
Statement 2: Its member states have equal voting rights.
- This statement is incorrect.
- The IMF operates on a weighted voting system.
- Voting power is determined by a member country's financial contribution to the IMF, known as its quota.
- Therefore, countries with larger quotas have more votes, leading to unequal voting rights among member states.
Conclusion
Based on the analysis:
- Correct Answer: Option 'A' (Statement 1 is correct, Statement 2 is incorrect).
- The IMF plays a crucial role in international finance, but its voting structure reflects the economic power of its member countries rather than offering equal rights.
This understanding is essential for grasping the dynamics of international financial institutions like the IMF, especially in the context of global economic governance.
To evaluate the correctness of the statements regarding the International Monetary Fund (IMF), let's analyze each one.
Statement 1: The IMF is one of the biggest moneylenders for any country.
- This statement is correct.
- The IMF provides financial assistance to countries facing balance of payments problems, making it one of the largest sources of financial support globally.
- It offers loans, which are often accompanied by conditions aimed at helping countries stabilize their economies.
Statement 2: Its member states have equal voting rights.
- This statement is incorrect.
- The IMF operates on a weighted voting system.
- Voting power is determined by a member country's financial contribution to the IMF, known as its quota.
- Therefore, countries with larger quotas have more votes, leading to unequal voting rights among member states.
Conclusion
Based on the analysis:
- Correct Answer: Option 'A' (Statement 1 is correct, Statement 2 is incorrect).
- The IMF plays a crucial role in international finance, but its voting structure reflects the economic power of its member countries rather than offering equal rights.
This understanding is essential for grasping the dynamics of international financial institutions like the IMF, especially in the context of global economic governance.
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With reference to International Monetary Fund (IMF), consider the following statements:1. The International Monetary Fund (IMF) is one of the biggest moneylenders for any country in the world.2. Its member states have equal voting rights.Which of the statements given above is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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