Samacheer Kalvi 12th Economics Guide Chapter 8 International Economic Organisations

Tamilnadu State Board New Syllabus Samacheer Kalvi 12th Economics Guide Pdf Chapter 8 International Economic Organisations Text Book Back Questions and Answers, Notes.

Tamilnadu Samacheer Kalvi 12th Economics Solutions Chapter 8 International Economic Organisations

12th Economics Guide International Economic Organisations Text Book Back Questions and Answers

PART – A

Multiple Choice questions

Question 1.
International Monetary Fund was an outcome of
a) Pandung conference
b) Dunkel Draft
c) Bretton woods conference
d) Doha conference
Answer:
c) Bretton woods conference

Question 2.
International Monetary Fund is having its headquarters at
a) Washington D. C.
b) Newyork
c) Vienna
d) Geneva
Answer:
a) Washington D. C.

Question 3.
IBRD is otherwise called
a) IMF
b) World bank
c) ASEAN
d) International Finance corporation
Answer:
b) World bank

Question 4.
The other name for Special Drawing Right is
a) Paper gold
b) Quotas
c) Voluntary Export Restrictions
d) None of these.
Answer:
a) Paper gold

Question 5.
The organization which provides long term loan is
a) World Bank
b) International Monetary Fund
c) World Trade Organization
d) BRICS
Answer:
a) World Bank

Question 6.
Which of the following countries is not a member of SAARC?
a) Sri Lanka
b) Japan
c) Bangladesh
d) Afghanistan
Answer:
b) Japan

Question 7.
International Development Association is an affiliate of
a) IMF
b) World Bank
c) SAARC
d) ASEAN
Answer:
b) World Bank

Question 8.
………………………….. relates to patents, copyrights, trade secrets, etc.,
a) TRIPS
b) TRIMS
c) GATS
d) NAMA
Answer:
a) TRIPS

Question 9.
The first ministerial meeting of WTO was held at
a) Singapore
b) Geneva
c) Seattle
d) Doha
Answer:
a) Singapore

Question 10.
ASEAN meetings are held once in every ……………….. years
a) 2
b) 3
c) 4
d) 5
Answer:
b) 3

Question 11.
Which of the following is not member of SAARC?
a) Pakistan
b) Sri lanka
c) Bhutan
d) China
Answer:
d) China

Question 12.
SAARC meets once in ……………………………. years.
a) 2
b) 3
c) 4
d) 5
Answer:
a) 2

Question 13.
The headquarters of ASEAN is
a) Jaharta
b) New Delhi
c) Colombo
d) Tokyo
Answer:
a) Jaharta

Question 14.
The term RRIC was coined in
a) 2001
b) 2005
c) 2008
d) 2010
Answer:
a) 2001

Question 15.
ASEAN was created in
a) 1965
b) 1967
c) 1972
d) 1997
Answer:
b) 1967

Question 16.
The Tenth BRICS summit was held in July 2018 at
a) Beijing
b) Moscow
c) Johannesburg
d) Brasilia
Answer:
c) Johannesburg

Question 17.
New Development Bank is associated with.
a) BRICS
b) WTO
c) SAARC
d) ASEAN
Answer:
a) BRICS

Question 18.
Which of the following does not come under ‘ six dialogue partners’ of ASEAN? .
a) China
b) Japan
c) India
d) North Korea
Answer:
d) North Korea

Question 19.
SAARC Agricultural Information centre ( SAIC ) works as a central informa¬tion institution for agriculture related resources was founded on.
a) 1985
b) 1988
c) 1992
d) 1998
Answer:
b) 1988

Question 20.
BENELUX is a form of
a) Free trade area
b) Economic Union
c) Common market
d) Customs union
Answer:
d) Customs union

PART-B

Answer the following questions in one or two sentences.

Question 21.
Write the meaning of Special Drawing Rights.
Answer:

1. The Fund has succeeded in establishing a scheme of Special Drawing Rights (SDRs) which is otherwise called ‘Paper Gold’.
2. They are a form of international reserves created by the IMF in 1969 to solve the problem of international liquidity.
3. They are allocated to the IMF members in proportion to their Fund quotas.
4. SDRs are used as a means of payment by Fund members to meet the balance of payments deficits and their total reserve position with the Fund.
5. Thus SDRs act both as an international unit of account and a means of payment.
6. All transactions by the Fund in the form of loans and their repayments, its liquid reserves, its capital, etc., are expressed in the SDR.

Question 22.
Mention any two objectives of ASEAN.
Answer:

1. To accelerate the economic growth, social progress, and cultural development in the region.
2. To promote regional peace and stability and adherence to the principles of the United Nations charter.

Question 23.
Point out any two ways in which IBRD lends to member countries.
Answer:
The Bank advances loans to members in two ways

1. Loans out of its own fund,
2. Loans out of borrowed capital.

Question 24.
Define common Market.
Answer:
Common market is a group formed by countries with in a geographical area to promote duty free trade and free movement of labour and capital among its members.

Question 25.
What is Free trade area?
Answer:
Free trade area is the region encompassing a trade bloc whose member countries have signed a free trade agreement.

Question 26.
When and where was SAARC secretariat established?
Answer:
South Asian Association For Regional Co-Operation (SAARC):
1. The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations, which was established on 8 December 1985 for the promotion of economic and social progress, cultural development within the South Asia region, and also for friendship and cooperation with other developing countries.

2. The SAARC Group (SAARC) comprises of Bangladesh, Bhutan, India, The Maldives, Nepal, Pakistan and Sri Lanka.

3. In April 2007, Afghanistan became its eighth member.

Question 27.
Specify any two affiliates of world Bank Group. (Write any 2)
Answer:

1. International Bank for Reconstruction and Development (IBRD)
2. International Development Association (IDA)
3. International Finance corporation (IFC)
4. Multilateral Investment Guarantee Agency (MIGA)
5. The International centre for settlement of Investment Disputes (ICSID)

PART – C

Answer the following questions in one paragraph.

Question 28.
Mention the various forms of economic integration.
Answer:
Economic integration takes the form of

• A free Trade Area: It is the region encompassing a trade bloc whose member countries have signed a free trade agreement.
• A customs union: It is defined as a type of trade bloc which is composed of a free trade area with no tariff among members and with a common external tariff.
• Common market: It is established through trade pacts. A group formed by coun-tries within a geographical area to promote duty-free trade and free movement of labour and capital among its members.
• An economic union: It is composed of a common market with a customs union.

Question 29.
What are trade blocks?
Answer:
1. Trade blocks cover different kinds of arrangements between or among countries for mutual benefit. Economic integration takes the form of Free Trade Area, Customs Union, Common Market and Economic Union.

2. A free trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, e.g. SAFTA, EFTA.

3. A customs union is defined as a type of trade block which is composed of a free trade area with no tariff among members and (zero tariffs among members) with a common external tariff, e.g. BENELUX (Belgium, Netherland and Luxumbuarg).

4. Common market is established through trade pacts. A group formed by countries within a geographical area to promote duty free trade and free movement of labour and capital among its members, e.g. European Common Market (ECM).

5. An economic union is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production and a common external trade policy. (e.g. European Economic Union).

Question 30.
Mention any three lending programmes of IMF.
Answer:
The Fund has created several new credit facilities for its members.

1. Extended Fund Facility:
Under this arrangement, the IMF provides additional borrowing facility up to 140% of the member’s quota, over and above the basic credit facility. The extended facility is limited for a period up to 3 years and the rate of interest is low.

2. Buffer Stock Facility:
The Buffer stock financing facility was started in 1969. The purpose of this scheme was to help the primary goods producing countries to finance contributions to buffer stock arrangements for the establisation of primary product prices.

3. Supplementary Financing Facility :
Under the supplementary financing facility, the IMF makes temporary arrange-ments to provide supplementary financial assistance to member countries facing payments problems relating to their present quota sizes.

Question 31.
What is a Multilateral Agreement?
Answer:
Multilateral trade agreement:
It is a multinational legal or trade agreements between countries. It is an agreement between more than two countries but not many. The various agreements implemented by the WTO such as TRIPS, TRIMS, GATS, AoA, MFA have been discussed.

Question 32.
Write the agenda of BRICS summit, 2018.
Answer:
South Africa hosted the 10th BRICS summit in July 2018. The agenda for the BRICS summit 2018 includes Inclusive growth, Trade issues, Global governance, shared prosperity, International peace, and security.

Question 33.
State briefly the functions of SAARC.
Answer:
The main functions of SAARC are as follows.

1. Maintenance of the cooperation in the region
2. Prevention of common problems associated with the member nations.
3. Ensuring strong relationships among the member nations.
4. Removal of poverty through various packages of programmes.
5. Prevention of terrorism in the region.

Question 34.
List but the achievements of ASEAN.
Answer:

• The main achievement of ASEAN has been the maintenance of an uninterrupted period of peace and stability during which the individual member countries have been able to concentrate on promoting rapid and sustained economic growth and modernization.
• ASEAN’S modernization efforts have brought about changes in the region’s structure of production.
• ASEAN has been the fourth largest trading entity in the world after the European Union the United States and Japan.

PART – D

Answer the following questions in about a page.

Question 35.
Explain the objectives of IMF.
Answer:
Objectives Of IMF:

1. To promote international monetary cooperation among the member nations.
2. To facilitate faster and balanced growth of international trade.
3. To ensure exchange rate stability by curbing competitive exchange depreciation.
4. To eliminate or reduce exchange controls imposed by member nations.
5. To establish multilateral trade and payment system in respect of current transactions instead of bilateral trade agreements.
6. To promote the flow of capital from developed to developing nations.
7. To solve the problem of international liquidity.

Question 36.
Bring out the functions of the World Bank.
Answer:
Investment for productive purposes :
The world Bank performs the function of assisting in the reconstruction and development of territories of member nations through the facility of investment for productive purposes.

Balance growth of international trade :
Promoting the long-range balanced growth of trade at the international level and maintaining equilibrium in BOPS of member nations by encouraging international investment.

Provision of loans and guarantees :
Arranging the loans or providing guarantees on loans by various other channels so as to execute important projects.

Promotion of foreign private investment:
The promotion of private foreign investment by means of guarantees on loans and other investments made by private investors. The Bank supplements private investment by providing finance for productive purposes out of its own resources or from borrowed funds.

Technical services:
The world Bank facilitates different kinds of technical services to the member countries through staff college and exports.

Question 37.
Discuss the role of WTO in India’s socio-economic development.
Answer:
WTO and India:
India is the founding member of the WTO. India favours a multilateral trade approach. It enjoys MFN status and allows the same status to all other trading partners. India benefited
from WTO on the following grounds:

1. By reducing tariff rates on raw materials, components and capital goods, it was able to import more for meeting her developmental requirements. India’s imports go on increasing.
2. India gets market access in several countries without any bilateral trade agreements.
3. Advanced technology has been obtained at cheaper cost.
4. India is in a better position to get quick redressal from trade disputes.
5. The Indian exporters benefited from wider market information.

Question 38.
Write a note on a) SAARC b) BRICS
Answer:
(a) South Asian Association For Regional Co-Operation (SAARC):

• The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations, which was established on 8 December 1985 for the promotion of economic and social progress, cultural development within the South Asia region, and also for friendship and co-operation with other developing countries.
• The SAARC Group (SAARC) comprises Bangladesh, Bhutan, India, The Maldives, Nepal, Pakistan, and Sri Lanka.
• In April 2007, Afghanistan became its eighth member.
• The basic aim of the organisation is to accelerate the process of economic and social development of member states through joint action in the agreed areas of cooperation.
• The SAARC Secretariat was established in Kathmandu (Nepal) on 16th January 1987.
• The first SAARC summit was held in Dhaka in the year 1985.
• SAARC meets once in two years. Recently, the 20th SAARC summit was hosted by Srilanka in 2018.

(b) BRICS:

• BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.
• Since 2009, the BRICS nations have met annually at formal summits.
• South Africa hosted the 10th BRICS summit in July 2018.
• The agenda for the BRICS summit 2018 includes Inclusive growth, Trade issues, Global governance, Shared Prosperity, International peace, and security.
• Its headquarters is in Shanghai, China.
• The New Development Bank (NDB) formerly referred to as the BRICS Development Bank was established by the BRICS States.
• The first BRICS summit was held in Moscow and South Africa hosted the Tenth Conference at Johanesberg in July 2018.
• India had an opportunity of hosting the fourth and Eighth summits in 2009 and 2016 respectively.
• The BRICS countries make up 21 percent of the global GDP. They have increased their share of global GDP threefold in the past 15 years.
• The BRICS are home to 43 percent of the world’s population.
• The BRICS countries have combined foreign reserves of an estimated $ 4.4 trillion.

12th Economics Guide International Economics Organisations Additional Important Questions and Answers

I. Choose the best Answer

Question 1.
The IMF has ……………………. member countries with Republic.
(a) 169
(b) 179
(c) 189
(d) 199
Answer:
(c) 189

Question 2.
The IMF and World Bank were started in ………
a) 1947
b) 1951
c) 1945
d) 1954
Answer:
c) 1945

Question 3.
At present, the IMF has ………….member countries.
a) 198
b) 189
c) 179
d) 197
Answer:
b) 189

Question 4.
International Monetary Fund headquarters are present in …………………….
(a) Geneva
(b) Washington DC
(c) England
(d) China
Answer:
(b) Washington DC

Question 5.
SDR stands for ………………
a) IMF
b) IBRD
c) Special Drawing Rights
d) World Trade Organization
Answer:
c) Special Drawing Rights

Question 6.
SDR was created on ………………….
a) 1950
b) 1951
c) 1969
d) 1967
Answer:
c) 1969

Question 7.
The name “International Bank for Reconstruction and Development” was first suggested by
a) India
b) America
c) England
d) France
Answer:
a) India

Question 8.
Special Drawing called …………………….
(a) Gold
(b) Metal
(c) Paper Gold
(d) Gold Paper
Answer:
(c) Paper Gold

Question 9.
The first WTO conference was held in Singapore in …………………
a) 1991
b) 1995
c) 1996
d) 1999
Answer:
c) 1996

Question 10.
It was planned to organize 12 th ministerial conference at ………………
a) Pakistan
b) Kazakhstan
c) Afghanistan
d) Washington
Answer:
b) Kazakhstan

Question 11.
IBRD otherwise called the …………………….
(a) IMF
(b) SDR
(c) SAF
(d) World Bank
Answer:
(d) World Bank

Question 12.
BRICS was established in …………….
a) 1985
b) 2001
c) 1967
d)1951
Answer:
b) 2001

Question 13.
The BRICS are home to …………………. percent of the world’s population.
a) 45
b) 43
c) 44
d) 21
Answer:
b) 43

Question 14.
The headquarters of SAARC is at ………………
a) Jakarta
b) Shangai
c) Washington
d) Kathmandu
Answer:
d) Kathmandu

Question 15.
The IBRD has ……………………. member countries.
(a) 159
(b) 169
(c) 179
(d) 189
Answer:
(d) 189

Question 16.
……………………. governed the world trade in textiles and garments since 1974.
(a) GATS
(b) GATT
(c) MFA
(d) TRIPS
Answer:
(c) MFA

Question 17.
Agriculture was included for the first time under …………………….
(a) GATS
(b) GATT
(c) MFA
(d) TRIMs
Answer:
(b) GATT

II. Match the Following

Question 1.
A) Bretton woods conference – 1) 1945
B) World Trade Organisation – 2) 1944
C) International Monetary Fünd – 3)1930
D) Great Economic Depression – 4)1995

Answer:
a) 2 4 1 3

Question 2.
A) SAARC – 1) Washington D.C
B) ASEAN – 2) Kathmandu
C) BRICS – 3) Jakarta
D) IMF – 4) Shangai

Answer:
c) 2 3 4 1

Question 3.
A) Free trade area – 1) European Economic Union
B) Customs union – 2) SAFTA
C) Common market – 3) BENELUX
D) Economic union – 4) European Common Market

Answer:
b) 2 3 4 1

III. Choose the correct pair :

Question 1.
a) SAARC – December 8, 1988
b) ASEAN – August 8, 1977
c) IBRD – 1944
d) BRIC – 2001
Answer:
d) BRIC – 2001

Question 2.
a) 189th member country of IMF – Republic of Nauru
b) Structural Adjustment facility – Paper Gold
c) First Conference of WTO – 1996, Malaysia
d) TRIPS – 1998
Answer:
a) 189th member country of IMF – Republic of Nauru

Question 3.
a) SAARC preferential Trading Agreement – EFTA
b) SAARC Agricultural Information centre – SAIC
c) South Asian Development Fund – SADF
d) European Economic union – EEU
Answer:
d) European Economic union – EEU

IV. Choose the Incorrect Pair:

Question 1.
a) International Monetary Fund – Exchange rate stability
b) Special Drawing Rights – Paper Gold
c) Structural Adjustment Facility – Balance of payment assistance
d) Buffer stock Financing facility – 1970
Answer:
d) Buffer stock Financing facility – 1970

Question 2.
a) International Bank for – World Bank Reconstruction and Development
b) World Bank Group – World Trade Organisation
c) India became a member of MIGA – January 1994
d) WTO – Liberalizing trade restrictions
Answer:
b) World Bank Group – World Trade Organisation

Question 3.
a) IGA, ICSID, IDA, IFC – World. Bank Group
b) Brazil, Russia, India, China, South Africa – BRICS
c) Pakistan, Nepal, Afghanistan, Bangladesh, India, Srilanka – ASEAN
d) WTO Agreements – TRIPS, TRIMS
Answer:
c) Pakistan, Nepal, Afghanistan, Bangladesh, India, Srilanka – ASEAN

V. Choose the correct Statement

Question 1.
a) The IMF and World Bank were started in 1944
b) The GATT was transformed into WTO in 1995.
c) The headquarters of the World Trade Organization is in Geneva.
d) the Republic of Nauru joined IMF in 2018.
Answer:
c) The headquarters of the World Trade organization is in Geneva.

Question 2.
a) ‘International Monetary Fund is like an International Reserve Bank’ – Milton Fried man
b) IMF established compensatory Financing Facility in 1963.
c) In December 1988 the IMF set up the Enhanced Structural Adjustment Facility (ESAF)
d) India is the sixth-largest member of the IMF.
Answer:
b) IMF established a compensatory Financing Facility in 1963.

Question 3.
a) SDR is the Fiat Money of the IMF.
b) The membership in IMF is not a prerequisite to becoming a member of IBRD
c) India is a member of World Bank’s International center for settlement of Investment Disputes.
d) First investment of IFC in India took place in 1960.
Answer:
a) SDR is the Fiat Money of the IMF.

VI. Choose the Incorrect Statement

Question 1.
a) The IBRD was established to provide long-term financial assistance to member countries.
b) The IBRD has 190 member countries.
c) India become a member of MIGA in January 1994.
d) India is one of the founder members of IBRD, IDA, and IFC.
Answer:
b) The IBRD has 190 member countries.

Question 2.
a) Intellectual property rights include copyright, trademarks, patents, geographical indications, etc.
b) TRIMS are related to conditions or restrictions in respect of foreign investment in the country.
c) Phasing out of Multi Fibre Agreement (MFA) by WTO affected India.
d) It is mandatory for the Dispute Settlement Body to settle any dispute within 18 months.
Answer:
c) Phasing out of Multi Fibre Agreement (MFA) by WTO affected India.

Question 3.
a) The SAARC group comprises Bangladesh, Bhutan, India, The Maldives, Nepal, Pakistan, and Sri Lanka.
b) An economic union is composed of a common market with a customs union.
c) Afghanistan joined SAARC on 3rd April 2007.
d) The 20th SAARC summit was held in Dhaka.
Answer:
d) The 20th SAARC Summit was held in Dhaka.

VII. Pick the odd one out:

Question 1.
a) Trade Association
b) Free trade Area
c) Custom union
d) Common market
Answer:
a) Trade Association

Question 2.
a) ASEAN
b) BRICS
c) SAARC
d) SDR
Answer:
d) SDR

Question 3.
a) IFC
b) MIGA
c) ASEAN
d) ICSID
Answer:
c) ASEAN

VIII. Analyse the Reason

Question 1.
Assertion (A): The IBRD was established to provide long-term financial assistance to member countries.
Reason (R): World bank helps its member countries with economic reconstruction and development.
Answer:
a) Assertion (A) and Reason (R) both are true, and (R) is the correct explanation of (A).

Question 2.
Assertion (A): TRIPS Agreement provides for granting product patents instead of process patents.
Reason (R): Intellectual property rights include copyright, trademark, patents, geographical indications, etc.
Answer:
b) Assertion (A) and Reason (R) both are true, but (R) is not the correct explanation of (A).
Options:
a) Assertion (A) and Reason (R) both are true, and (R) is the correct explanation of (A).
b) Assertion (A) and Reason (R) both are true, but (R) is not the correct explanation of (A).
c) Assertion (A) and Reason (R) both are false.
d) (A) is true but (R) is false.

IX. Two Mark Questions

Question 1.
Write IMF Functions group?
Answer:
The functions of the IMF are grouped under three heads.

1. Financial – Assistance to correct short and medium Tenn deficit in BOP;
2. Regulatory – Code of conduct and
3. Consultative – Counseling and technical consultancy.

Question 2.
What are the major functions of WTO?
Answer:

1. Administering WTO trade agreements
2. Forum for trade negotiations
3. Handling trade disputes
4. Monitoring national trade policies
5. Technical assistance and training for developing countries.

Question 3.
Write the World bank activities of Rural areas?
Answer:
The bank now also takes interest in the activities of the development of rural areas such as:

1. Spread of education among the rural people
2. Development of roads in rural areas and
3. Electrification of the villages.

Question 4.
What is a customs union?
Answer:
A customs union is defined as a type of trade bloc which is composed of a free trade area with no tariff among members and with a common external tariff.

Question 5.
Define World Trade Organisation?
Answer:

1. WTC headquarters located at New York, USA.
2. It featured the landmark Twin Towers which was established on 4th April 1973.
3. Later it was destroyed on 11th September 2001 by the craft attack.
4. It brings together businesses involved in international trade from around the globe.

Question 6.
What are TRIPS?
Answer:
Trade-Related Intellectual Property Rights (TRIPs). Which include copyright, trademarks, patents, geographical indications, industrial designs, and the invention of microbial plants.

Question 7.
What are trade blocks?
Answer:
Trade blocks are a set of countries that engage in international trade together and are usually related through a free trade agreement or other associations.

Question 8.
Who are “dialogue partners”?
Answer:
The ASEAN, there are six “dialogue partners” which have been participating in its deliberations. They are China, Japan, India, South Korea, New Zealand, and Australia.

Question 9.
In how many constituents of the World Bank group India become a member?
Answer:
India is a member of four of the five constituents of the World Bank Group.

1. International Bank for Reconstruction and Development.
2. International Development Association.
3. International Finance Corporation.
4. Multilateral Investments Guarantee Agency

Question 10.
What is SDR?
Answer:

• SDR is the Fiat Money of the IMF.
• A potential claim on underlying currency Basket.

Question 11.
Why was the SDR created?
Answer:

• To be “The” World Reserve Currency
• Create Global Liquidity.

Question 12.
How is the SDR valued?
Answer:
“The value of the SDR was initially defined as equivalent to 0.888671 grams of fine gold – which, at the time was also equivalent to one US dollar.

X. 3 Mark Questions

Question 1.
Brief notes on India and IMF?
Answer:
India and IMF:

1. Till 1970, India stood fifth in the Fund and it had the power to appoint a permanent Executive Director.
2. India has been one of the major beneficiaries of the Fund assistance.
3. It has been getting aid from the various Fund Agencies from time to time and has been regularly repaying its debt.
4. India’s current quota in the IMF is SDRs (Special Drawing Rights) 5,821.5 million, making it the 13th largest quota holding country at IMF with shareholdings of 2.44%.
5. Besides receiving loans to meet the deficit in its balance of payments, India has benefited in certain other respects from the membership of the Fund.

Question 2.
What are the achievements of IMF?
Answer:

• Establishments of monetary reserve fund :
• The fund has played a major role in achieving the sizeable stock of the national currencies of different countries.
• Monetary discipline and cooperation:
• To achieve this objective, it has provided assistance only to those countries which make sincere efforts to solve their problems.
• Special interest in the problems of UDCs.
• The fund has provided financial assistance to solve the balance of payment problem of UDCs.

Question 3.
Explain the objectives of WTO?
Answer:

1. To ensure the reduction of tariffs and other barriers.
2. To eliminate discrimination in trade.
3. To facilitate a higher standard of living.
4. To facilitate optimal use of the world’s resources.
5. To enable the LDCs to secure a fair share in the growth of international trade.
6. To ensure linkages between trade policies, environmental policies, and sustainable development.

Question 4.
What are the achievements of WTO?
Answer:

1. The use of restrictive measures for BOP problems has declined markedly.
2. Services trade has been brought into the multilateral system and many countries, as in goods are opening their markets for trade and investment.
3. The trade policy review mechanism has created a process of continuous monitoring of trade policy developments.

Question 5.
Explain the functions of WTO?
Answer:
The following are the functions of the WTO:

• It facilitates the implementation, administration, and operation of the objectives of the Agreement and of the Multilateral Trade Agreements.
• It provides the forum for negotiations among its members, concerning their multilateral trade relations in matters relating to the agreements.
• It administers the Understanding of Rules and Procedures governing the Settlement of Disputes.
• It cooperates with the IMF and the World Bank and its affiliated agencies with a view to achieving greater coherence in global economic policymaking.

Question 6.
Explain the achievements of BRICs.

• The establishment of the Contingent Reserve Arrangement (CRA) has further deepened and consolidated the partnership of its members in the economic-financial area.
• A New Development Bank was established with headquarters at Shangai, China in 2015.
• BRIC countries are in a leading position in setting the global agenda and have great influence in global governance.

XI. 5 Mark Questions
Question 1.
Explain the functions of IMF.
Answer:
1. Bringing stability to the exchange rate:

• The IMF is maintaining exchange rate stability.
• Emphasizes devaluation criteria.
• Restricting members to go in for multiple exchange fates.

2. Correcting BOP disequilibrium:
IMF helps in correcting short period disequilibrium in-the balance of payments of its member countries.

3. Determining par values:

• IMF enforces the system of determination of par value of the currencies of the member countries.
• IMF ensures smooth working of the international monetary system in favour of some developing countries.

4. Balancing demand and supply of currencies:
The Fund can declare a currency as scarce currency which is in great demand and can increase its supply by borrowing it from the country concerned or by purchasing the same currency in exchange for gold.

5. Reducing trade restrictions:
The Fund also aims at reducing tariffs and other trade barriers imposed by the member countries with the purpose of removing restrictions on remit¬tance of funds or to avoid discriminating practices.

6. Providing credit facilities:
IMF is providing credit facilities which include basic credit facility, extended fund facility for a period of three years, compensatory financing facility, and structural adjustment facility.