The international Monetary Fund Quiz

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The�international Monetary Fund Quiz - Quiz

The International Monetary Fund (IMF) is an international financial institution, headquartered in Washington, D. C., consisting of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world while periodically depending on the World Bank for its resources
Know more about it in this quiz.


Questions and Answers
  • 1. 

    Select the characteristics of the global system

    • A.

      Same as domestic system

    • B.

      No global governance or discipline

    • C.

      Self-help survival system

    • D.

      International organizations are based compulsory participation

    • E.

      International organizations are subject to the influence of states

    Correct Answer(s)
    B. No global governance or discipline
    C. Self-help survival system
    E. International organizations are subject to the influence of states
    Explanation
    The characteristics of the global system include the absence of global governance or discipline, making it a self-help survival system. Additionally, international organizations are subject to the influence of states, indicating that they are not entirely autonomous and their actions can be influenced by member states.

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  • 2. 

    Select the reasons states are inclined to cooperate

    • A.

      Economic gains 

    • B.

      Influence of the hegemon

    • C.

      International expectations

    • D.

      They are not inclined to cooperate

    Correct Answer(s)
    A. Economic gains 
    B. Influence of the hegemon
    C. International expectations
    Explanation
    States are inclined to cooperate for several reasons. Firstly, economic gains play a significant role as states recognize the benefits of cooperation in terms of trade, investment, and economic growth. Secondly, the influence of the hegemon, which refers to a dominant power, can motivate states to cooperate in order to maintain stability and security. Lastly, international expectations and norms can also shape state behavior, as states may feel pressure to cooperate in order to maintain their reputation and avoid isolation.

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  • 3. 

    After WWII, the new hegemonic power that emerged was the ________

    Correct Answer(s)
    US, USA
    Explanation
    After WWII, the United States emerged as the new hegemonic power. The war had severely weakened European nations, leaving the US as the dominant global power. The US possessed a strong economy, a powerful military, and played a key role in the establishment of international institutions like the United Nations. It also had significant political influence and was at the forefront of the Cold War against the Soviet Union. These factors combined to solidify the US as the new hegemonic power in the post-WWII era.

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  • 4. 

    T or F: International organizations are limited by state consensus

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    International organizations are limited by state consensus because they operate based on agreements and cooperation between sovereign states. These organizations, such as the United Nations or World Trade Organization, rely on the participation and consent of member states to carry out their mandates and make decisions. Without state consensus, international organizations would struggle to effectively implement policies or take action on global issues. Therefore, the statement that international organizations are limited by state consensus is true.

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  • 5. 

    Which international institution has the stated goal of exchange rate stability, short term financing to over balance of payments issues and avoid temporary economic crises

    • A.

      WB

    • B.

      IBRD

    • C.

      IMF

    • D.

      UN

    Correct Answer
    C. IMF
    Explanation
    The International Monetary Fund (IMF) is the correct answer. The IMF's main goal is to ensure exchange rate stability among member countries, provide short-term financing to countries facing balance of payments issues, and help prevent temporary economic crises. This is achieved through various measures such as providing financial assistance, offering policy advice, and promoting international cooperation. The World Bank (WB), International Bank for Reconstruction and Development (IBRD), and the United Nations (UN) also play important roles in international development and finance, but their primary objectives differ from those of the IMF.

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  • 6. 

    In 1971, the IMF shifted its mandate to.... 

    • A.

      Interest-free loans

    • B.

      Longer term financing

    • C.

      Equal voting share

    • D.

      Removal of the Gold Standard

    Correct Answer
    B. Longer term financing
    Explanation
    In 1971, the IMF shifted its mandate to longer term financing. This means that the IMF started focusing on providing financial assistance to member countries for a longer period of time, rather than just short-term loans. This shift was likely made to address the needs of countries that required sustained financial support to overcome economic challenges and promote stability. By offering longer term financing, the IMF could better support countries in their efforts to achieve economic growth and development.

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  • 7. 

    When members pay their quotas to the IMF, what benefits does that provide them?

    • A.

      Interest-Free Loans

    • B.

      Access to a pool of money

    • C.

      Special drawing rights

    • D.

      Voting Power

    Correct Answer(s)
    B. Access to a pool of money
    C. Special drawing rights
    D. Voting Power
    Explanation
    Paying quotas to the IMF provides members with access to a pool of money, which they can borrow from in times of financial need. It also grants them special drawing rights, which are a type of international reserve asset that can be used to supplement a member country's own reserves. Additionally, paying quotas gives members voting power within the IMF, allowing them to have a say in decision-making processes. Interest-free loans, however, are not a benefit provided by paying quotas to the IMF.

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  • 8. 

    If countries must reduce government expenditure, tighten monetary policy and privatize their industries in order to receive a loan, they are subject to... 

    • A.

      Conditionality

    • B.

      Balance of Payment

    • C.

      Tied Aid 

    • D.

      Borrowing

    Correct Answer
    A. Conditionality
    Explanation
    When countries are required to reduce government expenditure, tighten monetary policy, and privatize their industries in order to receive a loan, they are subject to conditionality. This means that the loan is conditional upon the country implementing certain economic reforms and policies as specified by the lender. Conditionality is often imposed by international financial institutions such as the International Monetary Fund (IMF) or the World Bank as a way to ensure that the borrowing country undertakes necessary measures to improve its economic stability and address any structural issues.

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  • 9. 

    Who stated that the IMF imposes a highly ideological "cookie-cutter" condition?

    • A.

      Sachs

    • B.

      McNamara

    • C.

      Yong Kim

    • D.

      Stiglitz

    Correct Answer
    D. Stiglitz
    Explanation
    Stiglitz is the correct answer because he has been a vocal critic of the IMF and has argued that the organization imposes a one-size-fits-all approach to economic policies, without taking into account the specific needs and circumstances of each country. He has referred to this approach as a "cookie-cutter" condition, suggesting that it is rigid and inflexible. Stiglitz's views on the IMF's policies have been widely discussed and debated in the field of economics.

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  • 10. 

    McNamara shifted the focus on the world bank to address ________ in 1975

    Correct Answer
    poverty
    Explanation
    In 1975, McNamara made a shift in the focus of the world bank to address poverty. This suggests that he redirected the bank's efforts and resources towards tackling the issue of poverty.

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  • 11. 

    In the World Bank, subscriptions and loan guarantees are based on what? 

    • A.

      Paid-in contributions

    • B.

      Callable contributions

    • C.

      Material Contributions

    • D.

      Expertise contributions

    Correct Answer(s)
    A. Paid-in contributions
    B. Callable contributions
    Explanation
    The subscriptions and loan guarantees in the World Bank are based on paid-in contributions and callable contributions. Paid-in contributions refer to the actual funds that member countries contribute to the bank, while callable contributions are the commitments made by member countries to provide additional funds if needed. Both types of contributions play a crucial role in supporting the bank's operations and financing development projects around the world.

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  • 12. 

    Who has Veto Power in the World Bank?

    • A.

      The US

    • B.

      The UK

    • C.

      France

    • D.

      China

    • E.

      Russia

    Correct Answer
    A. The US
    Explanation
    The United States has veto power in the World Bank. This means that they have the ability to block any decision or resolution made by the organization, regardless of the support it has from other member countries. The US holds the largest voting share in the World Bank, giving them significant influence over its policies and decisions. As a result, they have the power to shape the direction and priorities of the institution.

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  • 13. 

    T or F: The bank offers soft loans with virtually no interest to developing economies

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The bank offers soft loans with virtually no interest to developing economies. This means that the bank provides loans to developing economies at very low interest rates or sometimes even without any interest. This helps these economies to access financial resources at affordable terms, enabling them to invest in development projects and stimulate economic growth.

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  • 14. 

    What bank facilitated development for Latin America from Washington, with recipients having the majority of the vote?

    • A.

      Andean Development Corporation

    • B.

      Latin American Infrastructure Invest Bank

    • C.

      International Development Assistance

    • D.

      InterAmerican Development Bank

    Correct Answer
    D. InterAmerican Development Bank
    Explanation
    The InterAmerican Development Bank facilitated development for Latin America from Washington. It provided financial support and resources to promote economic growth and social development in the region. Recipients of the bank's assistance had the majority of the vote, allowing them to have a say in the decision-making process and prioritize their own development needs.

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  • 15. 

    The ________ leaders statement discussed major reforms of influence and shifts in voting shares

    Correct Answer
    Pittsburgh
  • 16. 

    As a means of diametrically opposing the existing western influence in International organizations, what did China do? 

    • A.

      Withdraw from the World Bank

    • B.

      Establish the Asian Infrastructure Investment Bank

    • C.

      Establish it's own branch of the IMF

    • D.

      Denounce Western Influence

    Correct Answer
    B. Establish the Asian Infrastructure Investment Bank
    Explanation
    China established the Asian Infrastructure Investment Bank as a means of diametrically opposing the existing western influence in international organizations. This move allowed China to have more control and influence in the development and financing of infrastructure projects in Asia, which were previously dominated by Western-led institutions like the World Bank. By establishing its own bank, China aimed to challenge the existing power dynamics and assert its position as a global economic leader.

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  • 17. 

    Select the demonstration of public and state influence on in International Financial Institutions

    • A.

      Pelosi Amendment

    • B.

      Inspection Panel

    • C.

      McNamara Shift

    • D.

      WB Environmental and Social Framework

    Correct Answer(s)
    A. Pelosi Amendment
    B. Inspection Panel
    D. WB Environmental and Social Framework
    Explanation
    The Pelosi Amendment, Inspection Panel, and WB Environmental and Social Framework are all examples of public and state influence on International Financial Institutions. The Pelosi Amendment refers to a legislative provision that requires the US to vote against loans to countries that fail to cooperate with international drug control efforts. The Inspection Panel is an independent accountability mechanism that allows individuals and communities affected by World Bank-funded projects to file complaints and seek remedies. The WB Environmental and Social Framework is a set of policies that guide the World Bank's investment decisions to ensure they are environmentally and socially sustainable. These examples demonstrate how public and state influence can shape the actions and policies of International Financial Institutions.

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  • 18. 

    Select the critics of the Bretton Woods Institutions

    • A.

      Ideologically supportive of Neoliberalism

    • B.

      Lack of accountability

    • C.

      Made significant strides in development

    • D.

      Negative impacts on communities

    Correct Answer(s)
    A. Ideologically supportive of Neoliberalism
    B. Lack of accountability
    D. Negative impacts on communities
    Explanation
    The critics of the Bretton Woods Institutions argue that they are ideologically supportive of Neoliberalism, which promotes free market capitalism and limited government intervention. They also criticize the lack of accountability within these institutions, as decisions are often made without proper transparency or democratic processes. Additionally, critics argue that the institutions have had negative impacts on communities, particularly in developing countries, through policies that prioritize the interests of multinational corporations and wealthy nations over the needs of local communities.

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  • 19. 

    A major critic of the UN is that it lacks... 

    • A.

      Lack of accountability

    • B.

      Caters to Western powers

    • C.

      Ideological legitimacy

    • D.

      None, the UN is perfect

    Correct Answer
    C. Ideological legitimacy
    Explanation
    The correct answer is "Ideological legitimacy." A major criticism of the UN is that it lacks ideological legitimacy. This means that some argue that the UN does not represent or reflect the values, beliefs, and interests of all nations equally. Critics claim that the UN is biased towards Western powers and their ideologies, which undermines its credibility and effectiveness as a global organization.

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  • 20. 

    T or F: Multilateralism is typically on a universal basis, unlike Plurilateralism

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Multilateralism refers to the cooperation and coordination among multiple countries on global issues, usually involving a large number of nations. It is based on the principle of inclusivity and aims to involve as many countries as possible. On the other hand, plurilateralism involves cooperation among a smaller group of countries with shared interests or goals. Unlike multilateralism, plurilateralism is not universal in nature and does not involve the participation of all countries. Therefore, the statement that multilateralism is typically on a universal basis, unlike plurilateralism, is true.

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  • 21. 

    Select the benefits of Multilateral institutions

    • A.

      Less direct control on what happens in the institution

    • B.

      Useful for solving common problems

    • C.

      Means of increasing interests

    • D.

      Long term engagement

    • E.

      Increased risk of donor bias

    • F.

      Lower overhead costs

    Correct Answer(s)
    B. Useful for solving common problems
    C. Means of increasing interests
    D. Long term engagement
    F. Lower overhead costs
    Explanation
    Multilateral institutions provide several benefits. They are useful for solving common problems as they bring together multiple countries to address global challenges collectively. They also serve as a means of increasing interests by promoting cooperation and collaboration among member states. Long term engagement is another advantage as these institutions foster sustained relationships and commitments among nations. Additionally, they offer lower overhead costs compared to individual countries tackling issues independently.

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  • 22. 

    Which groups report to the General Assembly?

    • A.

      Programs and Funds

    • B.

      Main Committees

    • C.

      Specialized Agencies

    • D.

      Secretariat

    • E.

      Ad Hoc Groups

    • F.

      Expert Bodies

    Correct Answer(s)
    A. Programs and Funds
    B. Main Committees
    D. Secretariat
    Explanation
    The groups that report to the General Assembly are the Secretariat, Programs and Funds, and Main Committees. These groups provide reports and updates on their respective areas of responsibility to the General Assembly, which is the main deliberative, policymaking, and representative organ of the United Nations. The Secretariat supports the work of the General Assembly and provides administrative and logistical support. Programs and Funds refer to the various specialized programs and funds under the United Nations, such as UNICEF and the World Food Programme. Main Committees are subsidiary bodies of the General Assembly that focus on specific areas of concern, such as disarmament and human rights.

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  • 23. 

    In addition to the General Assembly, the Great Powers formed the ________ to protect themselves and their influence

    Correct Answer(s)
    Security council, SC, UNSC
    Explanation
    The Great Powers formed the Security Council (SC) or the United Nations Security Council (UNSC) to protect themselves and their influence. The Security Council is a powerful body within the United Nations that is responsible for maintaining international peace and security. It consists of five permanent members (China, France, Russia, the United Kingdom, and the United States) and ten non-permanent members. The Security Council has the authority to impose sanctions, authorize military action, and make decisions binding on all UN member states. It serves as a mechanism for the Great Powers to collectively address global security issues and safeguard their interests.

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  • 24. 

    What have their own charters, governing bodies and are quasi-independent?

    • A.

      Programs and Funds

    • B.

      Bretton Woods Institutions

    • C.

      Secretariat

    • D.

      Specialized Agencies

    Correct Answer
    D. Specialized Agencies
    Explanation
    Specialized Agencies have their own charters, governing bodies, and are quasi-independent. This means that they operate with a certain level of autonomy and have their own rules and regulations. They are established by international agreements and have specific mandates to address specific issues or areas of concern. Examples of specialized agencies include the World Health Organization (WHO), the United Nations Educational, Scientific and Cultural Organization (UNESCO), and the International Labour Organization (ILO). These agencies work alongside the United Nations but have their own structures and decision-making processes.

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  • 25. 

    Which UN Program was founded to improve the health and welfare of children and advocated against the powered breast milk campaign?

    • A.

      UNICEF

    • B.

      UNCTAD

    • C.

      WHO

    • D.

      UNDP

    Correct Answer
    A. UNICEF
    Explanation
    UNICEF, also known as the United Nations Children's Fund, was founded to improve the health and welfare of children. It works towards providing healthcare, nutrition, education, and protection for children around the world. UNICEF also advocates against harmful practices, such as the promotion of powered breast milk, which can have negative effects on infant health. Therefore, UNICEF is the correct answer as it aligns with the objective of improving child health and welfare and opposing the powered breast milk campaign.

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  • 26. 

    What UN Progam fell out of favour with Western Countries when it started to promote anti-capitalist policies? 

    • A.

      WTO

    • B.

      UNCTAD

    • C.

      GATT

    • D.

      ILO

    Correct Answer
    B. UNCTAD
    Explanation
    UNCTAD, the United Nations Conference on Trade and Development, fell out of favor with Western countries when it started to promote anti-capitalist policies. This program, established in 1964, aimed to promote economic development, particularly in developing countries. However, its focus on advocating for policies that challenged the principles of capitalism, such as advocating for greater state intervention in the economy and opposing free trade, led to a loss of support from Western countries who favored market-based approaches to development.

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  • 27. 

    The UN is considered to have a _______________ agenda

    • A.

      Marxist

    • B.

      Top-Bottom

    • C.

      Grassroots

    • D.

      Bottom-up

    Correct Answer
    D. Bottom-up
    Explanation
    The term "bottom-up" refers to an approach or strategy that starts at the individual or local level and gradually builds up to a larger scale. In the context of the UN, having a "bottom-up" agenda means that it focuses on addressing the needs and concerns of individuals, communities, and countries from the grassroots level, and then uses this as a foundation to inform and shape its overall agenda and policies. This approach ensures inclusivity, participation, and responsiveness to the diverse perspectives and challenges faced by different regions and populations.

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  • 28. 

    What does UNDP have that provides them with a deeper understanding of their community and more convening power than the World Bank?

    • A.

      Extensive research

    • B.

      Human Development Report

    • C.

      Annual Conferences 

    • D.

      Resident Representatives

    Correct Answer
    D. Resident Representatives
    Explanation
    UNDP has Resident Representatives, which give them a deeper understanding of their community and more convening power than the World Bank. Resident Representatives are UNDP's senior representatives in countries, responsible for coordinating and implementing development programs. They have a direct presence in the communities they serve, allowing them to have a better understanding of local needs and challenges. This on-the-ground presence and engagement with local stakeholders give UNDP an advantage in convening power and building relationships with key actors in the community.

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  • 29. 

    T or F: Developed countries have more votes than Developing countries in UNDP

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is false because in the United Nations Development Programme (UNDP), each country has an equal vote regardless of whether it is a developed or developing country. The principle of equal representation is followed to ensure fairness and inclusivity in decision-making processes within the UNDP.

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  • 30. 

    Select the reasons UNDP is trusted by the South

    • A.

      Resident Representatives

    • B.

      Under the influence of the US

    • C.

      Country-owned programs

    • D.

      Provided support in key moments for developing countries

    • E.

      Overtly hegemonic

    Correct Answer(s)
    A. Resident Representatives
    C. Country-owned programs
    D. Provided support in key moments for developing countries
    Explanation
    The UNDP is trusted by the South for several reasons. Firstly, the presence of Resident Representatives ensures that the UNDP has a local presence and understanding of the needs and challenges of the countries it works with. Secondly, the emphasis on country-owned programs means that the UNDP respects and supports the priorities and decisions made by the governments of developing countries. Lastly, the UNDP has provided crucial support in key moments for developing countries, demonstrating its commitment to helping them overcome challenges and achieve their development goals.

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  • 31. 

    In 1990, Mahbub ul Haq, Amartya Sen, and Paul Streeten published this revolutionary document that acted as a counterpoint to the World Bank Development Report

    • A.

      Millenium Development Goals

    • B.

      Capability Approach Report

    • C.

      Sustainable Development Goals

    • D.

      Human Development Report

    Correct Answer
    D. Human Development Report
    Explanation
    The Human Development Report, published in 1990 by Mahbub ul Haq, Amartya Sen, and Paul Streeten, served as a groundbreaking document that challenged the perspectives presented in the World Bank Development Report. This report aimed to shift the focus of development from purely economic growth to a more holistic approach that emphasized human well-being and quality of life. It introduced the Human Development Index (HDI), which measures a country's progress based on factors such as life expectancy, education, and income. The Human Development Report has since become a significant tool for policymakers and researchers in assessing and promoting human development worldwide.

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  • 32. 

    T or F: The World Bank is both a partner and competitor with UNDP

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The World Bank and UNDP (United Nations Development Programme) are both international organizations that work towards promoting development and reducing poverty. While they have similar goals, they have different approaches and areas of focus. The World Bank primarily provides financial assistance and loans to developing countries, whereas UNDP focuses on policy advice, capacity building, and technical assistance. Despite their differences, they often collaborate and work together on various development projects, making them partners. However, they also compete in some aspects, such as securing funding and implementing projects, making them competitors as well. Therefore, the statement that the World Bank is both a partner and competitor with UNDP is true.

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  • 33. 

    Select the weaknesses of UNDP

    • A.

      Lacks focus and resources

    • B.

      Convening Power

    • C.

      Weak Operational capacity

    • D.

      Underqualified staff compared to WB

    • E.

      Trusted interlocuteur for the South

    Correct Answer(s)
    A. Lacks focus and resources
    C. Weak Operational capacity
    D. Underqualified staff compared to WB
    Explanation
    The weaknesses of UNDP include a lack of focus and resources, which means that it may struggle to prioritize and allocate resources effectively. Additionally, UNDP has a weak operational capacity, indicating that it may not have the necessary infrastructure or systems in place to efficiently implement projects. Furthermore, the organization is said to have underqualified staff compared to the World Bank, suggesting a potential lack of expertise and knowledge. These weaknesses can hinder UNDP's ability to effectively carry out its mission and achieve its goals.

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  • 34. 

    Which of the following is an example of a microbusiness?

    • A.

      Street vendor

    • B.

      Corner shop

    • C.

      Electricians

    • D.

      Sewing Factory

    Correct Answer
    A. Street vendor
    Explanation
    A street vendor is an example of a microbusiness because it is a small-scale business that operates on the streets, typically selling goods or services to the local community. Street vendors often have low start-up costs, a small number of employees (or even just the owner), and limited operations. They usually focus on a specific product or service and cater to a niche market.

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  • 35. 

    Select the issues with Informality

    • A.

      Allows for creativity

    • B.

      Vital for developing countries

    • C.

      Result of a lack of any other options

    • D.

      Little growth

    Correct Answer(s)
    C. Result of a lack of any other options
    D. Little growth
    Explanation
    Informality can be seen as a result of a lack of any other options because when formal employment opportunities are limited or unavailable, people may resort to informal work as a means of survival. This can lead to little growth in terms of job security, income stability, and career advancement. However, informality also allows for creativity as individuals may find innovative ways to make a living outside of traditional formal structures. Additionally, informality can be vital for developing countries as it provides a source of income and employment for a significant portion of the population.

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  • 36. 

    Who argues that an important part of encouraging entrepreneurship in developing countries is strengthening and enforcing property rights?

    • A.

      Muhammad Yunus

    • B.

      John Danning 

    • C.

      Hernando de Soto

    • D.

      Prahala and Hammond

    Correct Answer
    C. Hernando de Soto
    Explanation
    Hernando de Soto argues that an important part of encouraging entrepreneurship in developing countries is strengthening and enforcing property rights.

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  • 37. 

    In micro-financing, what acts as collateral?

    • A.

      Collective responsibility

    • B.

      Enforced property rights

    • C.

      Earned profits

    • D.

      Means of production

    Correct Answer
    A. Collective responsibility
    Explanation
    In micro-financing, collective responsibility acts as collateral. This means that individuals within a group are jointly responsible for repaying the loan. If one member of the group is unable to repay, the other members are expected to cover the repayment. This system provides a form of security for lenders, as it reduces the risk of default. By relying on collective responsibility, micro-financing institutions are able to extend loans to individuals who may not have traditional forms of collateral, such as property or assets.

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  • 38. 

    The orchestrator of production and transactions with a cluster or network of cross-border interval and external relationships is referring to what?

    • A.

      MNCs

    • B.

      MNEs

    • C.

      TNCs

    • D.

      All the above

    Correct Answer
    A. MNCs
    Explanation
    The term "orchestrator of production and transactions with a cluster or network of cross-border interval and external relationships" is commonly used to describe multinational corporations (MNCs). MNCs have operations in multiple countries and engage in cross-border transactions, managing relationships with various stakeholders. MNEs (multinational enterprises) and TNCs (transnational corporations) are also used interchangeably with MNCs to refer to these types of corporations. Therefore, the correct answer is "All the above" as all three terms (MNCs, MNEs, TNCs) represent the same concept.

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  • 39. 

    T or F: Ownership is necessary to be a multinational firm

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Ownership is not necessary to be a multinational firm. A multinational firm is a company that operates in multiple countries, either through subsidiaries or branches. Ownership refers to having control or ownership of the subsidiary or branch in a foreign country. However, there are cases where multinational firms operate in foreign countries without full ownership, such as through joint ventures or partnerships. Therefore, ownership is not a requirement to be considered a multinational firm.

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  • 40. 

    In recent trends, what is the most important source of funds for developing countries?

    • A.

      FDI

    • B.

      NGOs

    • C.

      ODA

    • D.

      Bilateral agreements

    Correct Answer
    A. FDI
    Explanation
    Foreign Direct Investment (FDI) is the most important source of funds for developing countries in recent trends. FDI refers to the investment made by foreign companies or individuals in the domestic market of a developing country. This investment helps in creating job opportunities, transferring technology and knowledge, and boosting the overall economic growth of the country. FDI is preferred by developing countries as it brings in capital, expertise, and access to global markets, which are crucial for their development. Additionally, FDI promotes industrialization, enhances productivity, and encourages innovation, making it a significant source of funds for developing countries.

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  • 41. 

    T or F: South-South flows indicate that Global South states are more likely to invest in their struggling neighbours

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    South-South flows refer to financial investments, aid, or trade between countries in the Global South. This suggests that Global South states are more likely to invest in their struggling neighbors, as they share similar economic and development challenges. This can be seen as a form of solidarity and cooperation among developing countries, aiming to support each other's growth and development. Therefore, the statement "South-South flows indicate that Global South states are more likely to invest in their struggling neighbors" is true.

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  • 42. 

    Select the reasons one cannot make blanket statements about the impacts of MNCs

    • A.

      The firms and investors are heterogenous

    • B.

      There's different policies at play

    • C.

      They all have the same investment strategies

    • D.

      They are operating under the capitalist system

    Correct Answer(s)
    A. The firms and investors are heterogenous
    B. There's different policies at play
    Explanation
    One cannot make blanket statements about the impacts of MNCs because the firms and investors involved are heterogeneous, meaning they vary in terms of their size, industry, goals, and strategies. Additionally, there are different policies at play in different countries and regions, which can greatly influence the impact of MNCs. Therefore, it is not accurate to assume that all MNCs have the same investment strategies or that they are all operating under the same conditions within the capitalist system.

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  • 43. 

    T or F: Prior to investing, MNCs have the bargaining advantage

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    MNCs, or multinational corporations, typically have a bargaining advantage prior to investing due to their size, resources, and global presence. They often have more bargaining power compared to smaller local businesses or governments, allowing them to negotiate better terms, lower costs, and favorable conditions for their investments. This advantage can stem from their ability to bring in foreign direct investment, access to advanced technology or expertise, and their ability to leverage their market share or global supply chains. As a result, MNCs often have the upper hand in negotiations and can secure more favorable investment deals.

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  • 44. 

    When states learn how to manage and regulate an industry to extract better terms

    • A.

      Market knowledge

    • B.

      Obsolescing bargain

    • C.

      Firm failure

    • D.

      Microfinancing

    Correct Answer
    B. Obsolescing bargain
    Explanation
    Obsolescing bargain refers to a situation where a foreign investor initially receives favorable terms from a host country but as the investment becomes more established, the host country gradually changes the terms to its advantage. In this context, the correct answer suggests that when states learn how to manage and regulate an industry to extract better terms, it can be seen as an obsolescing bargain. This implies that the host country gains more control and benefits from the industry as it becomes more knowledgeable and experienced in regulating it.

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  • 45. 

    T or F: The Washington Consensus supports MNCs being involved in development

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The Washington Consensus refers to a set of economic policies that were advocated by international financial institutions in the 1980s and 1990s. These policies emphasized free market principles, deregulation, and privatization. One of the key aspects of the Washington Consensus was the promotion of foreign direct investment and the involvement of multinational corporations (MNCs) in the development process. Therefore, it can be concluded that the Washington Consensus does support MNCs being involved in development.

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  • 46. 

    T or F: Free trade agreements limit policies that host country governments can implement

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Free trade agreements do limit the policies that host country governments can implement. These agreements are designed to promote open and unrestricted trade between countries by reducing barriers such as tariffs and quotas. In order to achieve this, governments are required to adhere to certain rules and regulations outlined in the agreement. These rules often restrict the ability of governments to implement certain policies that may hinder free trade, such as imposing high tariffs or implementing protectionist measures. Therefore, it can be concluded that free trade agreements do limit the policies that host country governments can implement.

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  • 47. 

    When states are afraid to put in good policy for fear of being sued by MNCs, this is referred to as... 

    • A.

      Regulatory Chill

    • B.

      Obsolescing bargain

    • C.

      MNC standards

    • D.

      Unfortunate reality

    Correct Answer
    A. Regulatory Chill
    Explanation
    Regulatory Chill refers to the situation where states are hesitant to implement effective policies due to the fear of facing lawsuits from multinational corporations (MNCs). This fear arises from the potential legal actions that MNCs can take against states under international trade and investment agreements. The term "Regulatory Chill" highlights the chilling effect this fear has on states' willingness to enact policies that may be in the public interest but could potentially harm the interests of MNCs.

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  • 48. 

    What strategy suggests that MNCs should sell goods to the poor at a lower price because it will improve their quality of life

    • A.

      Bottom of the Pyramid

    • B.

      Gruameen Bank

    • C.

      Poor Partnerships

    • D.

      Corporate Social Responsibility

    Correct Answer
    A. Bottom of the Pyramid
    Explanation
    The strategy of selling goods to the poor at a lower price is known as the Bottom of the Pyramid approach. This strategy suggests that by making products more affordable for the poor, it can help improve their quality of life. It recognizes that there is a large market potential at the bottom of the economic pyramid and aims to tap into this market by offering products and services that are tailored to the needs and affordability of the poor. By doing so, MNCs can not only improve the lives of the poor but also create new business opportunities and contribute to sustainable development.

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  • 49. 

    Select the benefits of Partnerships

    • A.

      Focus on a common problem

    • B.

      Requires a high level of engagement

    • C.

      Multisector collaboration that enhances competitiveness and profitabilty

    • D.

      Lessens the budgetary strain on NGOs

    • E.

      Rarely equitable

    • F.

      Creates reputation threats for NGOs

    Correct Answer(s)
    A. Focus on a common problem
    C. Multisector collaboration that enhances competitiveness and profitabilty
    D. Lessens the budgetary strain on NGOs
    Explanation
    Partnerships offer several benefits, including focusing on a common problem, which allows different organizations to come together and work towards a shared goal. Multisector collaboration enhances competitiveness and profitability by combining resources, expertise, and networks from different sectors. This collaboration also lessens the budgetary strain on NGOs, as they can share costs and resources with their partners. However, partnerships are rarely equitable, meaning that one partner may have more power or influence than the others. Additionally, partnerships can create reputation threats for NGOs if their partners engage in unethical or controversial practices.

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  • 50. 

    The Bill and Melinda Gates Foundation is an example of what?

    • A.

      Corporate Foundation

    • B.

      Partnership

    • C.

      Corporate Social Responsibility

    • D.

      Market Exploitation

    Correct Answer
    A. Corporate Foundation
    Explanation
    The Bill and Melinda Gates Foundation is an example of a corporate foundation. This is because it is a philanthropic organization that was established by a corporation, in this case, Microsoft co-founder Bill Gates and his wife Melinda Gates. The foundation uses its resources to address various global issues such as poverty, healthcare, and education. It operates independently from the corporation but is funded by its endowment.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 23, 2021
    Quiz Created by
    Alfredhook3
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