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 Real Effective Exchange Rate (REER) indicates an improvement in trade competitiveness
  3. An increase in 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?
  1. 1 and 2 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3
Reflection in IAS EXPRESS
Indian Economy Mindmap Course » External Sector of India
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