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  1. The capital of IMF is generated by contribution of the
    1. Credit
    2. Deficit financing
    3. Member nations
    4. Borrowings
Correct Option: C

The capital of IMF is generated by contribution of the member nations. Each member of the IMF is assigned a quota, based broadly on its relative size in the world economy, which determines its maximum contribution to the IMF's financial resources. On joining the IMF, a country normally pays up to one-quarter of its quota in the form of widely accepted foreign currencies (such as the U.S. dollar, euro, yen, or pound sterling) or Special Drawing Rights (SDRs). The remaining three-quarters are paid in the country's own currency.



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