I know of transposing instruments. A transposing instrument is one where the player reads a C, plays a C, and what sounds is the name of the key of the instrument. Those instruments are often referred to with the key in their name, for example Bb trumpet, Bb clarinet, Horn in F, Eb alto saxophone, Bb tenor saxophone. Pieces for these instruments are often transposed.
I know of non-transposing instruments. A non-transposing instrument is something like a piano -- when you read a A on the staff, you play a A and it sounds a concert pitch A (440 Hz). Most string instruments (like violin, viola, cello) fall into this category.
I know of some folk/ethnic instruments, who are restricted to a diatonic scale, and therefore to a particular key. So these instruments really are "in a key"
I play nyckelharpa, which is a string instrument, and for all intents and purposes of my question, could be considered a violin (a distant relative). When I read a C, I play a C, and it sounds like a C. So that makes it a non-transposing instrument, right? It is also a chromatic instrument, which means that I can play in all keys (though some keys a bit more easy than others).
A friend plays soprano saxophone. That is a transposing instrument, pitched in the key of Bb (I looked it up). They asked me, for the purpose of jamming together, in which key I play, and I don't know how to answer that question. They know that I play a folk/ethnic instrument, and may have assumed that it is a diatonic instrument.
When in a folk jam session, they ask me in which key my non-transposing chromatic instrument (like violin or nyckelharpa) is in, what do I answer?