Passage 5
The World Bank is easy to understand. The lending nations subscribe toward its capital stock in proportion to their economic importance. The Bank can use its capital to make international loans to people or countries whose projects seem economically sound but who can not get private loans at reasonably low interest rates.
The World Bank's true importance arises from something greater than the loans that it can make out on its own capital. More important is the fact that it can float bonds and use the proceeds to make loans. The bonds are safe because they are backed by the credit of all the nations. Also, the Bank can insure loans in return for a small premium; private parties can then put up the money, knowing the Bank's credit is squarely behind the loan.
As a result of such long-term credits, we have seen goods and services flowing out of the advanced nations aimed at international development. If sound, these loans will be repaid in full. If some go sour, the loss will be paid out of the Bank's interest or premium earnings. If still more, the loss will be spread over all the member nations.
Has the Bank been a financial success? Decidedly. Especially after Robert McNamara (formerly of Ford Motor and the Pentagon) became its head in the late 1960s, the Bank has stepped up the scale of its activities sharply. An increasing proportion or its financing now goes through the International Development Agency, set up by the Bank to make "soft loans" to nations for education, roads, hospitals, etc.; and through its International Finance Corporation, established to make loans to foreign development banks for financing private investment projects.
For the 1980s, McNamara has shifted the Bank's focus toward a concern for the very poorest in the developing countries. The best private commercial banks, by their nature, cannot have such a concern for human hunger and disease, for minimum life standards and the mitigation of inequality of opportunity and position.
1. The World Bank collects its capital mainly from _____ .
［A］ the private contributions of big business and investors
［B］ the interest of loans it distributed to the economically sound projects
［C］ the countries which contribute money to the Bank based on their position in economics
［D］ the countries which are provided with international loans according to their economic importa
2. Which of the following business doesn't the World Bank involve?
［A］ Making loans from the proceeds of the bones
［B］ Providing loans out of its capital
［C］ Securing the advantages of the gold standard
［D］ Getting premium paid for loan insurance
3. The aim of the World Bank's credit lies in _____ .
［A］ Floating bones
［B］ promoting international development
［C］ insuring the money put up by private parties
［D］ spreading out its loss over all the member nations
4. Which of the following can be thought as the main aim of the World Bank now?
［A］ The World Bank has made" soft loans" for education, roads, hospitals, etc.
［B］ The World Bank has made loans for foreign development banks
［C］ The World Bank would finance private investment projects
［D］ The World Bank would have more concern for developing countries