Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) General Knowledge Economy External Sector and Currency Exchange rate
Consider the following statements regarding the Real Effective Exchange Rate (REER):
1. It is the weighted average of a country's currency in relation to an index or basket of other major currencies, adjusted for the effects of inflation.
2. An increase in the index of REER as compared to its base year is an indicator of an undervalued currency.
Which of the statements given above is/are correct?
1
1 only
2
2 only
3
Both 1 and 2
4
Neither 1 nor 2