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Question

Convertibility of rupee implies ___________.

A

being able to convert rupee notes into gold.

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B

allowing the value of rupee to be fixed by market forces.

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C

freely permitting the conversion of rupee to other currencies and vice-versa.

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D

developing an international market for currencies in India.

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Solution

The correct option is C freely permitting the conversion of rupee to other currencies and vice-versa.
Convertibility of rupee implies freely permitting the conversion of rupee to other currencies and vice-versa. India permits full current account convertibility of rupee but only partial capital account convertibility.

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Q. 44. Consider the following statement about Convertibility of rupee.
1. It implies convertibility of rupee into gold
2. Allowing the value of rupee to be fixed by market forces.
3. Freely permitting the conversion of rupee to other currencies and vice versa.
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Which of the above statement(s) is/are incorrect?

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Q. Consider the following statements about rupee convertibility.

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