Country Focus Background Polity & Governance

The UAE is a constitutional federation of seven emirates, with Abu Dhabi as capital, Arabic as official language and a dirham pegged to the US dollar

The UAE passport topping the world rankings this week is a reminder of the country behind it: the UAE government portal says the passport holds the 1st position globally.
The portal describes the UAE as a constitutional federation of seven emirates.
The seven emirates are Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.
Abu Dhabi city is the capital of the UAE.
Arabic is the official language and Islam the official religion.
The Arab Emirati Dirham (AED) is pegged to the US dollar at 1 USD = AED 3.6725.

Capital: Abu Dhabi Emirates: 7 Official language: Arabic Dirham peg: 1 USD = AED 3.6725
Why it matters for exams: Capital, official language, currency and federal structure are the most frequently asked basic facts about any country, and the dirham peg matters for the Gulf remittances Kerala receives.
Kerala PSCUPSCSSC

In plain words

AED Arab Emirati Dirham — The UAE's currency, pegged to the US dollar.

Federation A union of states under a federal constitution — The UAE joins seven emirates under one federal government while each keeps its own local government.