It's number 57 on the FED test. It was discussed ad nauseum on the NFHS discussion forum. Someone asked the same question. What it came right down to was that a) the question was poorly written, b) nobody seems to know what the real intention of the question is and c) how the words "in effect" are to be interpreted.

Our thread on that site broke down every part of the question. When you come right down to it, the issue of IFR really has no menaing to the question except to say that it means that there are runners on first and second or bases loaded, and there are less than two outs. Everything else written indicates the question is TRUE. Even if IFR was called by error players on both sides should be aware of the fact that an intentionally dropped BUNT in this situation is an immediate dead ball. The correct answer is in fact TRUE.

The words "IN EFFECT" should not imply that the IFR has been called, only that the situation is such that the IFR could be called if there was in fact an infield fly. I'm sure that cooler heads will prevail and the answer key eventually will be adjusted to allow either question to be correct, or they just throw out the question entirely.