ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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pay a quota
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pay each of the existing members an entrance fee
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agree to allow IMF conditionally
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recognize the importance of the US
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Detailed explanation-1: -What are IMF quotas? Quotas are the building blocks of the IMF’s financial and governance structure. An individual member country’s quota broadly reflects its relative position in the world economy. Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account.
Detailed explanation-2: -India’s quota in the IMF, which determines voting shares in the multi-lateral lending agency, is 2.75 per cent.
Detailed explanation-3: -Who can apply for membership hi the IMF? The prospective member must be a country in control of its own foreign affairs, and it must be willing and able to meet the obliga-tions of membership contained in the IMF’s Articles of Agreement-its charter.
Detailed explanation-4: -When a country borrows from the IMF, the government agrees to adjust its economic policies to overcome the problems that led it to seek financial assistance. These policy adjustments are conditions for IMF loans and help to ensure that the country adopts strong and effective policies.