Question

Convertibility of the rupee implies __________________.

• A. being able to convert rupee notes into gold
• B. allowing the value of the rupee to be fixed by market forces
• C. freely permitting the conversion of rupee to other major currencies and vice versa
• D. developing an international market for currencies in India

Answer 1

Answer: (C)

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

Convertibility implies that rupee can be converted into any other country's denomination and vice versa with the exchange rate prevailing at that point of time.