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Questions and Answers
What was the original purpose of the International Monetary Fund (IMF) according to the Bretton Woods agreement?
What was the original purpose of the International Monetary Fund (IMF) according to the Bretton Woods agreement?
- To establish a gold exchange standard
- To provide financial aid to developing countries
- To oversee the international monetary system and ensure exchange rate stability (correct)
- To encourage restrictions on trade and currency exchange
What is the definition of 'devaluation' as per the text?
What is the definition of 'devaluation' as per the text?
- The stabilization of exchange rates
- The increase in the official rate at which one currency is exchanged for another
- The reduction in the official rate at which one currency is exchanged for another (correct)
- The elimination of currency exchange restrictions
What led to the shift in the IMF's role in 1971?
What led to the shift in the IMF's role in 1971?
- The collapse of the Bretton Woods system (correct)
- The oil crises of 1973 and 1979
- The increase in developing countries afflicted with debt crises
- The transition to a gold exchange standard
What did the IMF increasingly focus on from the early 1980s onwards?
What did the IMF increasingly focus on from the early 1980s onwards?
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What is the definition of 'exchange rate' based on the text?
What is the definition of 'exchange rate' based on the text?
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Study Notes
The International Monetary Fund (IMF)
- The original purpose of the IMF, according to the Bretton Woods agreement, was to promote international monetary cooperation, exchange rate stability, and provide temporary financial assistance to countries facing balance of payments problems.
Key Concepts
- Devaluation: a reduction in the value of a country's currency relative to other currencies, usually to correct a balance of payments deficit.
Shift in the IMF's Role
- The shift in the IMF's role in 1971 was led by the collapse of the Bretton Woods system, which allowed currencies to float against the US dollar, and the US suspension of gold convertibility.
IMF's Focus from the 1980s
- From the early 1980s onwards, the IMF increasingly focused on providing financial assistance to developing countries and countries in transition, and promoting economic reform and stability.
Exchange Rate
- Exchange rate: the price of one country's currency in terms of another country's currency, determining how much of one currency can be exchanged for another.
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Description
Test your knowledge of the International Monetary Fund (IMF) with this quiz. Explore the history, functions, and impact of this intergovernmental organization established in 1947.
