Question

QUESTION 32

1. Which statement referring to the role of multilateral financial institutions is false?

   	A.	In accordance with their policies, they don’t take on financial commitments in countries with high political risk.
   	B.	They participate in privatization.
   	C.	They also promote private financing.

Answer 1

The correct option is 1

Multilateral financial institutions are the banks who promotes economic development of it's member nations especially to poorer countries which may have higher political risks than usual. Examples of Multilateral financial institutions are International monetary fund, world bank, asian develpment bank etc., Their main aim is to facilitate infrastructure, roads, and economic sustainability to developing countries, They give loans to them at minimal rate or no interest rates.

These banks support policy reforms such as privatisation of government owned industries like electricity and agriculture etc. and they also promote private financing as they provide finance to public sector projects also. Therefore, option 1 is the correct.