Question : What is the term used to describe the practice of a country manipulating its currency to gain an unfair trade advantage?
Option 1: Currency hedging
Option 2: Currency speculation
Option 3: Currency pegging
Option 4: Currency manipulation
Correct Answer: Currency manipulation
Solution : The correct answer is d) Currency manipulation
Currency manipulation refers to the practice of a country intentionally influencing the value of its currency in order to gain an unfair trade advantage over other countries. This can be achieved through various means, such as government interventions in the foreign exchange market, setting an artificially low exchange rate, or implementing restrictive monetary policies. Currency manipulation can make a country's exports more competitive and its imports more expensive, leading to trade imbalances and potentially distorting global trade flows. It is considered a controversial practice and can be subject to scrutiny by other countries and international organizations.
Question : What is the term used to describe the buying and selling of currencies with the expectation of making a profit from exchange rate fluctuations?
Option 3: Currency manipulation
Option 4: Currency pegging
Question : What is the term used to describe a situation where a country's central bank fixes the value of its currency to another currency at a specified exchange rate?
Option 1: Currency intervention
Option 2: Currency hedging
Question : What is the term used to describe the practice of buying and selling currencies to profit from differences in exchange rates across different markets?
Option 1: Currency pegging
Option 3: Currency arbitrage
Option 4: Currency speculation
Question : What is the term used to describe the simultaneous buying and selling of currencies to take advantage of differences in exchange rates in different markets?
Option 4: Currency arbitrage
Question : Which of the following is an example of an exchange rate risk mitigation strategy?
Option 2: Currency pegging
Option 3: Currency speculation
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile