5 Questions
What was the original purpose of the International Monetary Fund (IMF) according to the Bretton Woods agreement?
To oversee the international monetary system and ensure exchange rate stability
What is the definition of 'devaluation' as per the text?
The reduction in the official rate at which one currency is exchanged for another
What led to the shift in the IMF's role in 1971?
The collapse of the Bretton Woods system
What did the IMF increasingly focus on from the early 1980s onwards?
Supporting developing countries afflicted with debt crises
What is the definition of 'exchange rate' based on the text?
The price at which one currency is exchanged for another
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.
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.
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