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.
