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

Question

Share Report Error

The Nominal Effective Exchange Rate is:

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

B. the rupee-dollar rate only

C. the difference between exports and imports

D. the inflation-adjusted exchange rate

Answer: Option A

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

Request complete Subject PDF

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Economy Set 1 Questions

Question #1

The 'spot market' in foreign exchange deals with:

A. options only

B. future delivery of currencies

C. immediate delivery of currencies

D. futures only

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option C

Explanation:
Spot foreign exchange transactions involve immediate delivery of currencies.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a characteristic of the 'Classical Dichotomy'?

A. Only fiscal policy is neutral

B. Real and nominal variables are determined separately and money is neutral

C. Real and nominal variables are always interdependent

D. Money affects real output in the long run

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option B

Explanation:
The classical dichotomy is the proposition that real variables (output, employment, relative prices) are determined independently of nominal variables and that money is neutral in the long run.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of 'Multi-Sided Platforms'?

A. They serve only one group of users

B. They never exhibit network effects

C. They are identical to traditional linear firms

D. They intermediate between two or more distinct groups of users and must solve the chicken-and-egg problem of attracting both sides

View Answer & Solution Discuss

Get Complete Subject PDF for Economy GK

Correct Answer: Option D

Explanation:
Multi-sided platforms bring together two or more distinct customer groups that need each other and whose interactions are mediated by the platform; pricing and design must balance the interests of all sides.

This question belongs to: Economy GK Economy Set 1

Explore All Economy Set 1 MCQs