Answers to WB / IMF Quiz and Further Information

1. The World Bank says its mission is:

• To reduce global poverty
• To achieve the Millennium Development Goals
• To build a climate for investment, jobs and sustainable growth
• All of the above
• None of the above, these are the goals of the IMF

Answer: D

Explanation: The World Bank says it works to reduce world poverty through programs that help people help themselves and their environment. The Millennium Development Goals are a set of goals that was made by the UN to be achieved by 2015 which range from eradicating extreme poverty, to promoting gender equality to providing a universal education system. For more information on the Millennium Development Goals visit http://www.un.org/millenniumgoals/. The World Bank claims that it builds a climate for investment, jobs and sustainable growth so that economies will grow in developing countries.

2. What is the IMF's primary purpose?

• To reduce world poverty
• To provide developing countries with loans
• To ensure stability of the international monetary system
• To ensure environmental stability
• None of the above

Answer: C

Explanation: The stated primary purpose of the IMF is to ensure stability of the international monetary system. Having stability through exchange rates and international payments enables countries to buy and exchange goods from each other.

3. True or False: The IMF and World Bank were both created at the same time in 1944 and are collectively known as the Bretton Woods Institutions.

• True
• False

Answer: A
Explanation: The IMF and World Bank were both created in July 1944 at the resort community of Bretton Woods, New Hampshire by the US, UK and other countries. They have since been referred to as the Bretton Woods Institutions.

4. The similarities between the IMF and World Bank are:

I. Both are owned by the governments of their member nations
II. Both have headquarters in Washington DC
III. Both are primary lending institutions.

• I
• I and II but not III
• I and III but not II
• II and III but not I
• I, II, and III

Answer: B

Explanation: Both the World Bank and the IMF are owned and directed by the governments of their member nations. They both have their headquarters in Washington, DC. In fact, at one time they even shared a building and to this day they share a common library. The World Bank was created to finance economic development and it gives loans to developing countries. The IMF is primarily an overseer of its members monetary and exchange rate policies and it is not primarily a lending institution.

5. ____ gives loans to poorer countries where as ____ gives financial assistance to any of its member nations.

• The IMF; The World Bank
• The World Bank; The United States
• The World Bank; The IMF
• Canada, Europe
• None of the Above

Answer: C

Explanation: Neither wealthier countries nor private individuals can borrow from the World Bank. It focuses on lending money to creditworthy governments of developing nations. The IMF makes financial assistance available to any of its member nations, rich or poor.

6. True or False: Countries must join the IMF to be eligible to join the World Bank.

• True
• False

Answer: A

Explanation: The IMF and World Bank complement each others work, and it is required that countries join the IMF in order to join the World Bank.

7. True or False: The IMF is larger and has a more complex organizational structure than the World Bank.

• True
• False

Answer: B

Explanation: The IMF is smaller and has a less complex organizational structure than the World Bank. The World Bank is three times larger than the IMF and is comprised of two major organizations - the International Bank for Reconstruction and Development and the International Development Association (IDA). IDA provides grants and loans to the poorest countries.