The Capital Account Convertibility of the Indian Rupee implies:
✓ Correct answer: c) that the Indian Rupee can be exchanged for any major currency for the purpose of trading financial assets
ExplanationCapital Account Convertibility (CAC) allows the unre- stricted exchange of the Indian rupee with foreign currencies for transactions related to investment and financial assets, such as foreign direct investment (FDI), portfolio investment, and external borrowings.Unlike current account convertibility, which deals with trade in goods and services, Capital account convertibility enables cross-border capital flows without regulatory restrictions.India has partially implemented Capital Account Convertibility, with restrictions on foreign investments in specific sectors and external borrowings.296
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