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Convertibility of rupee implies:
- a)being able to convert rupee notes into gold
- b)allowing the value of rupee to be fixed by market forces
- c)freely permitting the conversion of rupee to other currencies and vice versa
- d)developing an international market for currencies in India
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Convertibility of rupee implies:a)being able to convert rupee notes in...
The ease with which a country's currency can be converted into another currency.
Most Upvoted Answer
Convertibility of rupee implies:a)being able to convert rupee notes in...
Explanation:
Convertibility of a currency refers to the ability to exchange that currency for another currency or gold without any restrictions or limitations. In the case of the Indian rupee, convertibility implies the ability to freely convert rupees into other currencies and vice versa.
Here are some key points explaining the concept of rupee convertibility:
1. Free flow of currency: Convertibility of the rupee means that there are no restrictions on the inflow or outflow of the currency. This allows individuals and businesses to freely convert rupees into other currencies, and vice versa.
2. Market-driven exchange rate: When the rupee is freely convertible, its exchange rate is determined by market forces, such as supply and demand. This means that the value of the rupee will fluctuate based on various economic factors, including inflation, interest rates, and trade balances.
3. Boost to international trade: Rupee convertibility can help promote international trade by making it easier for businesses to conduct transactions in different currencies. This can also lead to increased foreign investment in India, as investors can more easily convert their funds into rupees.
4. Reserve currency status: A freely convertible rupee could potentially become a reserve currency, meaning that other countries may hold it as a reserve asset. This would boost India's standing in the global economy and enhance its ability to conduct international transactions.
Overall, rupee convertibility is a key aspect of India's economic development, as it allows for greater integration into the global economy and facilitates international trade and investment.
Convertibility of a currency refers to the ability to exchange that currency for another currency or gold without any restrictions or limitations. In the case of the Indian rupee, convertibility implies the ability to freely convert rupees into other currencies and vice versa.
Here are some key points explaining the concept of rupee convertibility:
1. Free flow of currency: Convertibility of the rupee means that there are no restrictions on the inflow or outflow of the currency. This allows individuals and businesses to freely convert rupees into other currencies, and vice versa.
2. Market-driven exchange rate: When the rupee is freely convertible, its exchange rate is determined by market forces, such as supply and demand. This means that the value of the rupee will fluctuate based on various economic factors, including inflation, interest rates, and trade balances.
3. Boost to international trade: Rupee convertibility can help promote international trade by making it easier for businesses to conduct transactions in different currencies. This can also lead to increased foreign investment in India, as investors can more easily convert their funds into rupees.
4. Reserve currency status: A freely convertible rupee could potentially become a reserve currency, meaning that other countries may hold it as a reserve asset. This would boost India's standing in the global economy and enhance its ability to conduct international transactions.
Overall, rupee convertibility is a key aspect of India's economic development, as it allows for greater integration into the global economy and facilitates international trade and investment.
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Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer?
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Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer?.
Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer?.
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Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Convertibility of rupee implies:a)being able to convert rupee notes into goldb)allowing the value of rupee to be fixed by market forcesc)freely permitting the conversion of rupee to other currencies and vice versad)developing an international market for currencies in IndiaCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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