The Nominal Effective Exchange Rate is: MCQ with Answer and Explanation

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The Nominal Effective Exchange Rate is:

A. the difference between exports and imports

B. a trade-weighted average of the rupee against a basket of currencies

C. the inflation-adjusted exchange rate

D. the rupee-dollar rate only

Answer: Option B

Solution (By JKSSB Mock Tests)

NEER is a trade-weighted average of the domestic currency against a basket of foreign currencies.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The term 'Repo Rate' refers to the rate at which:

A. RBI borrows from commercial banks

B. RBI lends to commercial banks against securities

C. Commercial banks lend to RBI

D. Government borrows from RBI

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Correct Answer: Option B

Explanation:
Repo rate is the rate at which the Reserve Bank of India lends money to commercial banks against government securities for short-term needs.

This question belongs to: Economy GK Economy Set 1

Question #2

Core inflation excludes which of the following?

A. housing prices

B. imported goods

C. all manufactured goods

D. food and fuel prices

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Correct Answer: Option D

Explanation:
Core inflation excludes volatile food and fuel prices to capture underlying inflation trends.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is NOT a source of agricultural finance in India?

A. Cooperative societies

B. Stock exchanges for small farmers

C. NABARD

D. Commercial banks

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Correct Answer: Option B

Explanation:
Stock exchanges primarily serve corporate entities. Agricultural finance is provided by commercial banks, cooperatives, RRBs and refinanced by NABARD.

This question belongs to: Economy GK Economy Set 1

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