Previous Year Question
With reference to the World Bank and International Monetary Fund, which of the following statements is/are correct?
The World Bank and International Monetary Fund were set up together and are popularly known as Bretton Woods Twins.
Headquarters of International Monetary Fund and World Bank are located at Washington D.C. and New York respectively.
Select the correct answer from the code given below:
Only 2
Neither 1 nor 2
Both 1 and 2
Only 1
Correct Answer: D
Detailed Solution
Statement 1 is correct. The International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), i.e. the World Bank, both originated from the Bretton Woods Conference of 1944.
The conference was held at Bretton Woods, New Hampshire, USA, in July 1944 and was attended by representatives of 44 countries. Because of this common origin, the IMF and World Bank are known as the Bretton Woods Institutions and, in general studies terminology, also as the Bretton Woods Twins.
The two institutions have different purposes. The IMF primarily deals with international monetary stability, exchange-rate and balance-of-payments problems, while the World Bank focuses mainly on long-term development and development financing.
Statement 2 is incorrect. The IMF is headquartered in Washington, D.C., but the World Bank is not headquartered in New York; it is also headquartered in Washington, D.C. In fact, the headquarters of the two institutions are located close to each other in Washington, D.C.