Convertibility of rupee implies
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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.
Correct Answer:
C. freely permitting the conversion of rupee to other currencies and vice versa.
Explanation:
The term convertibility of rupee means freely permitting the conversion of rupee to other foreign currencies and vice versa at market-determined exchange rates. It allows people to exchange Indian rupees for foreign currencies without restrictions, facilitating smooth international trade and investment.
Hence, the correct answer is (c) freely permitting the conversion of rupee to other currencies and vice versa.
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