16 Questions
When was the International Monetary Fund (IMF) established?
1944
What is the primary purpose of the International Monetary Fund (IMF)?
To foster global monetary cooperation
How many countries are members of the International Monetary Fund (IMF)?
190
What does the IMF do to ensure the stability of the international monetary system?
Keep track of the global economy and the economies of member countries
What was added to the IMF's mandate in 2012?
Include all macro-economic and financial sector issues that bear on global stability
How does the IMF assist its member countries?
Lending to countries with balance of payments difficulties
What is one of the main objectives of the International Monetary Fund (IMF)?
To promote international monetary cooperation
How many members does the International Monetary Fund (IMF) have today?
190
What is the primary aim of IMF lending to countries?
To provide breathing room for implementing adjustment policies
What may lead a country to seek financial assistance from the IMF?
Severe capital outflows
Which of the following is not a main objective of the International Monetary Fund (IMF)?
Increase global poverty
What was the initial goal of the International Monetary Fund (IMF) when it was developed?
To promote international monetary cooperation and redo the global payment system
What circumstance may lead a country to need financial assistance from the IMF?
Sudden drop in the prices of key exports in the borrowing country
What is one way in which IMF lending can help a country facing economic challenges?
By providing breathing room for implementing adjustment policies
What is NOT a goal of IMF lending to countries?
Create financial instability in borrowing countries
Why might a country facing severe capital outflows seek financial assistance from the IMF?
To implement measures to strengthen its economy and widen its export base
Study Notes
International Monetary Fund (IMF)
- Established in 1944
- Primary purpose: to promote global monetary cooperation, exchange rate stability, and provide temporary financial assistance to countries facing economic difficulties
Membership and Objectives
- 189 countries are members of the IMF
- One of the main objectives: to promote international monetary cooperation and exchange rate stability
- Main objective: to provide temporary financial assistance to countries facing economic difficulties
Ensuring Stability
- Ensures stability of the international monetary system by:
- Promoting international monetary cooperation
- Encouraging exchange rate stability
- Providing temporary financial assistance to countries facing economic difficulties
Mandate and Lending
- Added to the IMF's mandate in 2012: macroprudential policy
- Assists member countries by providing temporary financial assistance to countries facing economic difficulties
- Primary aim of IMF lending: to help countries facing economic difficulties to restore macroeconomic stability and reduce poverty
- May lead a country to seek financial assistance: balance of payments problems, international reserves depletion, or a loss of confidence in the economy
- IMF lending can help a country facing economic challenges by:
- Providing temporary financing to address balance of payments problems
- Restoring macroeconomic stability
- Reducing poverty
- NOT a goal of IMF lending: to provide permanent financial assistance to countries
Initial Goal and Circumstances
- Initial goal when developed: to promote international monetary cooperation and exchange rate stability
- Circumstances that may lead a country to need financial assistance:
- Severe capital outflows
- Balance of payments problems
- International reserves depletion
- Loss of confidence in the economy
Test your knowledge about the International Monetary Fund (IMF), an organization of 190 countries that fosters global monetary cooperation, financial stability, international trade, employment, economic growth, and poverty reduction. Learn about its establishment in 1944 and its role in the global economy.
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