CSEET Economics: Global Financial Institutions – MCQs

CSEET Economics: Global Financial Institutions – MCQs

1. Which of the following institutions is known as the "lender of last resort" for countries facing balance of payments crises?

A. World Bank

B. IMF

C. WTO

D. OECD

Answer: B. IMF

Explanation: The International Monetary Fund provides short-term financial support to countries facing balance of payments problems.

2. The World Bank was established in which year?

A. 1944

B. 1947

C. 1950

D. 1965

Answer: A. 1944

Explanation: It was founded in 1944 at the Bretton Woods Conference along with the IMF.

3. The main objective of the World Bank is:

A. Promoting free trade

B. Providing long-term loans for development projects

C. Controlling inflation

D. Regulating exchange rates

Answer: B. Providing long-term loans for development projects

Explanation: The World Bank supports infrastructure, education, and poverty reduction projects.

4. Which of the following is a part of the World Bank Group?

A. IFC

B. IMF

C. WTO

D. OECD

Answer: A. IFC

Explanation: The International Finance Corporation (IFC) is a World Bank Group member focusing on private sector development.

5. The headquarters of the IMF is located in:

A. Geneva

B. New York

C. Washington D.C.

D. London

Answer: C. Washington D.C.

Explanation: Both IMF and World Bank have their headquarters in Washington D.C., USA.

6. The International Development Association (IDA) mainly helps:

A. High-income countries

B. Middle-income countries

C. Low-income countries

D. Private corporations

Answer: C. Low-income countries

Explanation: IDA provides interest-free loans and grants to the poorest nations.

7. Which organization was formed to promote international trade?

A. IMF

B. World Bank

C. WTO

D. UNCTAD

Answer: C. WTO

Explanation: The World Trade Organization promotes free and fair trade by setting and enforcing trade rules.

8. Which of the following replaced the GATT?

A. IMF

B. WTO

C. World Bank

D. OECD

Answer: B. WTO

Explanation: The World Trade Organization replaced GATT in 1995.

9. The main focus of the International Monetary Fund (IMF) is:

A. Poverty alleviation

B. Exchange rate stability and financial cooperation

C. Environmental protection

D. Private sector investment

Answer: B. Exchange rate stability and financial cooperation

Explanation: IMF ensures global monetary cooperation and financial stability.

10. Which of the following institutions provides technical and financial support for infrastructure in developing countries?

A. IMF

B. World Bank

C. WTO

D. ADB

Answer: D. ADB

Explanation: The Asian Development Bank (ADB) focuses on infrastructure and social development in Asia-Pacific.

11. The International Finance Corporation (IFC) primarily supports:

A. Private sector projects

B. Public sector projects

C. NGOs

D. Governments only

Answer: A. Private sector projects

Explanation: IFC invests in private businesses to promote development in emerging markets.

12. The headquarters of the World Trade Organization (WTO) is located in:

A. Paris

B. Geneva

C. New York

D. Rome

Answer: B. Geneva

Explanation: WTO’s headquarters is in Geneva, Switzerland.

13. Which country has the largest voting power in the IMF?

A. India

B. China

C. United States

D. Japan

Answer: C. United States

Explanation: Voting power in IMF depends on a country’s financial contribution (quota), with the U.S. holding the largest share.

14. Which of the following provides loans to governments for structural adjustment programs?

A. IMF

B. WTO

C. World Bank

D. OECD

Answer: C. World Bank

Explanation: The World Bank provides long-term loans for structural and economic reforms.

15. The Asian Infrastructure Investment Bank (AIIB) was initiated by:

A. India

B. USA

C. China

D. Japan

Answer: C. China

Explanation: AIIB, headquartered in Beijing, was founded by China in 2015 to promote infrastructure investment in Asia.

16. The primary aim of the OECD is to:

A. Regulate exchange rates

B. Promote economic growth and global trade among developed countries

C. Provide loans to poor countries

D. Finance infrastructure projects

Answer: B. Promote economic growth and global trade among developed countries

Explanation: OECD acts as a policy forum for advanced economies to promote sustainable growth.

17. Which of these is NOT a World Bank Group institution?

A. IFC

B. IDA

C. IMF

D. MIGA

Answer: C. IMF

Explanation: IMF is separate; the World Bank Group includes IBRD, IDA, IFC, MIGA, and ICSID.

18. The International Monetary Fund publishes which of the following reports?

A. Global Economic Prospects

B. World Economic Outlook

C. Human Development Report

D. Global Competitiveness Report

Answer: B. World Economic Outlook

Explanation: IMF publishes this semiannual report analyzing global economic trends.

19. MIGA provides:

A. Insurance against political risks for investors

B. Loans to governments

C. Monetary policy advice

D. Trade dispute resolution

Answer: A. Insurance against political risks for investors

Explanation: MIGA (Multilateral Investment Guarantee Agency) protects foreign investors against political instability.

20. The World Bank’s International Bank for Reconstruction and Development (IBRD) lends to:

A. Low-income countries

B. Middle-income and creditworthy low-income countries

C. Only developed countries

D. NGOs

Answer: B. Middle-income and creditworthy low-income countries

Explanation: IBRD offers loans at market-based rates for development.

21. The African Development Bank (AfDB) focuses primarily on:

A. Africa’s economic and social progress

B. Asian infrastructure

C. European monetary policy

D. Global trade

Answer: A. Africa’s economic and social progress

Explanation: AfDB funds development projects in African nations.

22. Which international body promotes financial stability and cooperation among central banks?

A. IMF

B. BIS

C. WTO

D. OECD

Answer: B. BIS

Explanation: The Bank for International Settlements serves as a bank for central banks.

23. India became a member of the IMF and World Bank in:

A. 1944

B. 1945

C. 1947

D. 1950

Answer: B. 1945

Explanation: India joined both institutions right after their establishment.

24. Which of these organisations assists developing countries in trade and investment promotion?

A. UNCTAD

B. WTO

C. IMF

D. OECD

Answer: A. UNCTAD

Explanation: The United Nations Conference on Trade and Development supports developing countries in integrating into the global economy.

25. The primary purpose of global financial institutions like IMF and World Bank is to:

A. Encourage protectionism

B. Promote global economic stability and development

C. Restrict trade

D. Fund political activities

Answer: B. Promote global economic stability and development

Explanation: Both institutions work to strengthen global financial cooperation and sustainable growth