2011 GS Paper I, all questions
UPSC Prelims 2011 · GS Paper I
Question 75: Economy and Social Development
Regarding the International Monetary Fund, which one of the following statements is correct ?
aIt can grant loans to any country
bIt can grant loans to only developed countries
cIt grants loans to only member countries
dIt can grant loans to the central bank of a country
AnswerThe answer is (c).
The IMF is an organisation of member countries and lends only to them, to help with balance of payments problems, using the quotas members have contributed. It cannot lend to non-members, firms or individuals, and its lending is not confined to developed or poor countries: advanced and developing economies have both borrowed from it. Loans go to the member's authorities, usually the finance ministry or central bank.
Why each option is right or wrong
- (a) It cannot lend to any country, only to its members.
- (b) It is not limited to developed countries; developing and advanced members alike have borrowed.
- (c) Right: loans go only to member countries.
- (d) Loans go to the member country's authorities; the central bank is only one channel.
Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2011, General Studies Paper I, Series A. The paper on upsc.gov.in.