Economy

2 questions

• 2022 · Question 2 · External Sector

  With reference to the Indian economy, consider the following statements : 1. An increase in Nominal Effective Exchange Rate (NEER) indicates the appreciation of rupee. 2. An increase in the Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness. 3. An increasing trend in domestic inflation relative to inflation in other countries is likely to cause an increasing divergence between NEER and REER. Which of the above statements are correct ?

  Choose your answer

  (a)1 and 2 only(b)2 and 3 only(c)1 and 3 only(d)1, 2 and 3

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  Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)

• 2022 · Question 61 · External Sector

  Consider the following statements : 1. Tight monetary policy of US Federal Reserve could lead to capital flight. 2. Capital flight may increase the interest cost of firms with existing External Commercial Borrowings (ECBs). 3. Devaluation of domestic currency decreases the currency risk associated with ECBs. Which of the statements given above are correct ?

  Choose your answer

  (a)1 and 2 only(b)2 and 3 only(c)1 and 3 only(d)1, 2 and 3

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  Source: UPSC, Civil Services (Preliminary), General Studies Paper I (opens in a new tab)