How should we understand the exaltation of Jews above other people?

The Arabic word “alam” is derived from the root “ilm” which means the sign, trace or signature of something. Everything that shows the existence of the Creator is “alam”. Lord of all creation (rabbu’l-alameen) means the owner of all creation.

As for the same word that passes in 2:47, it comes to the meaning of “nations”, “people”. So the true translation should be: “Children of Israel! Remember what I bestowed upon you and that I exalted you above all the peoples of the world”. The verse reminds people of Hebrew origin (not only Jews) the choosing of them for sending books and messengers. It does not mean that they are superior to any.

Please see also the link below for a similar question:

http://www.islamandquran.org/how-does-jews-get-to-be-super-power-although-they-are-cursed