i. GDP of the country
ii. Degree of Openness
iii. Demographic dividend
iv. Economic variability
v. International Reserves
Choose the correct answer based on the code given below:
Understanding IMF Quotas and Their Calculation
The International Monetary Fund (IMF) uses quotas as fundamental components of its financial and governance structure. As the question states, a member country's quota is designed to broadly reflect its relative standing in the global economy. Determining this quota involves assessing several key economic indicators of the member country.
Key Parameters for IMF Quota Calculation
The calculation of a member country's quota is based on a formula that considers multiple factors. Based on the IMF's methodology, the following parameters are crucial:
- i. GDP of the country: Gross Domestic Product (GDP) is a primary measure of the size of a country's economy. A larger GDP generally indicates a larger economic contribution and capacity, thus influencing the quota size.
- ii. Degree of Openness: This refers to the extent to which a country trades with other nations. It's often measured by the sum of exports and imports relative to GDP. A higher degree of openness suggests greater integration into the global economy.
- iv. Economic variability: This parameter assesses the stability of a country's economy. It typically looks at fluctuations in economic indicators like GDP and current account receipts. Countries with more volatile economies might have their quotas adjusted to account for this risk.
- v. International Reserves: The level of a country's foreign exchange reserves, including gold, indicates its ability to meet international payment obligations and manage its currency's exchange rate. Higher reserves can imply greater financial capacity.
Parameters Not Directly Used in Quota Calculation
While demographic factors are important for a country's development, the 'Demographic dividend' (iii) is not a direct input into the standard IMF quota calculation formula. The formula prioritizes measures of economic size, integration, stability, and financial capacity.
Conclusion on Quota Calculation Factors
Considering the factors traditionally used by the IMF to determine member quotas, the parameters relevant to reflecting a country's relative position in the world economy are:
- GDP of the country (i)
- Degree of Openness (ii)
- Economic variability (iv)
- International Reserves (v)
Therefore, the correct combination includes parameters i, ii, iv, and v.
Important Questions from Economic development
- Below mentioned are four countries having largest Foreign Exchange Reserves in the world in October 2024. Arrange these countries in decreasing order of their Foreign Exchange Reserves.
i. India
ii. Japan
iii. China
iv. Switzerland
Choose the correct order: - Arrange the following sources of revenue for the Government of India mentioned in the Union Budget of 2024-25 in descending order:
i. Goods & Service Tax & other taxes
ii. Borrowing and Other Liabilities
iii. Corporation tax
iv. Income Tax
Choose the correct answer: - The FRBM (Fiscal Responsibility and Budget Management) framework mandates the Central Government to limit the Central Government Debt and the General Government Debt by $31^{st}$ March 2025. What are the limits of the Central Government Debt and the General Government Debt, respectively?
- Consider the following statements regarding National Electronic Fund Transfer (NEFT) and Real-Time Gross Settlement (RTGS):
1. In National Electronic Fund Transfer (NEFT), the transaction happens in batches and hence it is slow
2. In Real-Time Gross Settlement(RTGS), transactions happen in real time and hence being fast
3. There is no minimum limit in RTGS
4. There is a Rs 2 Lakh minimum limit for NEFT
How many of the above Statement/s is/are correct? - Consider the following statements regarding the "Monetary Policy Committee".
i. The RBI Governor has to vote both in the first instance and in case of a tie.
ii. The monetary policy committee has to meet three times a year.
Choose the correct answer:
