Which institution primarily provides short-term financial assistance to countries facing balance of payments problems? MCQ with Answer and Explanation

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Which institution primarily provides short-term financial assistance to countries facing balance of payments problems?

A. ADB

B. IMF

C. WTO

D. World Bank

Answer: Option B

Solution (By JKSSB Mock Tests)

The IMF provides short-term financial assistance to countries with balance of payments problems.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'capability approach' to development was propounded by:

A. W.W. Rostow

B. Milton Friedman

C. Arthur Lewis

D. Amartya Sen

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Correct Answer: Option D

Explanation:
Amartya Sen propounded the capability approach to development.

This question belongs to: Economy GK Economy Set 1

Question #2

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Which of the following is a feature of the 'Uncovered Interest Parity' puzzle or forward-premium puzzle?

A. Forward rates are perfect predictors of future spot rates

B. High-interest currencies tend to appreciate rather than depreciate as uncovered interest parity would predict

C. High-interest currencies always depreciate as predicted

D. Interest differentials are always zero

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Correct Answer: Option B

Explanation:
Empirical evidence often shows that currencies with high interest rates tend to appreciate, contrary to the prediction of uncovered interest parity that they should depreciate; this is known as the forward-premium puzzle.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'eight core industries' in India include:

A. coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, electricity

B. IT services, banking, insurance

C. agriculture, textiles, chemicals

D. coal, petroleum, pharmaceuticals, textiles

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Correct Answer: Option A

Explanation:
The eight core industries are coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity.

This question belongs to: Economy GK Economy Set 1

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