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1.Explain why real effective exchange rate and a country's competitiveness are negatively related? Refer to the factors affecting real exchange rate while answering this question.

2. What are the 'three arrows' of Abenomics? Briefly explain them.

3. Explain the difference between (i) Fixed exchange rate system and flexible exchange rate system (ii) Nominal effective exchange rate (NEER) and real effective exchange rate (REER).

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