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UPSC 2002: Consider the following statements: Full convertibility of the rupee may mean 1. its free float with other international currencies. 2. its direct exchange with any other international currency at any prescribed place inside and outside the country. 3. it acts just like any other international currency. Which of these statements are correct?
(a)1 and 2
(b)1 and 3
(c)2 and 3
(d)1, 2 and 3
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Not attemptedCorrect Answer: (d) 1, 2 and 3
Full convertibility implies that the rupee is freely floated against other currencies (1), can be exchanged directly anywhere at market rates (2) and functions like any fully convertible international currency (3). All three statements describe facets of full current- and capital-account convertibility, so option (d) is correct. ([scribd.com](https://www.scribd.com/document/819879928/2002-QP-AW))
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Frequently Asked Questions
What is the correct answer to this UPSC 2002 Indian Economy question?▼
The correct answer is option (d): 1, 2 and 3. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this External Sector & Balance Of Payments question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2002, GS Paper 1, as Question 137. It falls under Indian Economy > External Sector & Balance Of Payments.
What is the difficulty level of this UPSC question?▼
This question is rated "moderate". It requires sound conceptual understanding of the topic.
How many UPSC Prelims questions have been asked from External Sector & Balance Of Payments?▼
UPSC has asked 49 questions from External Sector & Balance Of Payments (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.