Multiple Choice Questions and Answers (MCQs) on Convertibility For Civil Services
Question 1 : Capital account convertibility of the Indian rupee implies
a) That the Indian rupee can be exchanged by authorized dealers for travel
b) That the Indian rupee can be exchanged for any major currency for the purpose of trade in goods and services
c) That the Indian rupee can be exchanged for any major currency for the purpose of trading in financial assets
d) None of the above
Answer : c
Question 2 : One of the important goals of the economic liberalization policy is to achieve high convertibility of the Indian rupee.
Which of the following is not a benefit of convertibility ?
a) Convertibility of the rupee will stabilize its exchange value against major currencies of the world.
b) It will attract more foreign capital inflow in India
c) It will help promote exports
d) It will discourage imports to India
Answer : d
Question 3 : Which of the following statements is correct with respect to the convertibility of Indian rupee?
a) It is convertible on capital account
b) It is convertible on current account
c) It is convertible both on current and capital account
d) None of the above
Answer : b
Question 4 : Consider the following statements:
Full convertibility of the rupee may mean
- Its free float with other international currencies
- Its direct exchange with any other international currency at any prescribed place inside and outside the country
- It acts just like any other international currency
Which of the statements given above are correct?
a) 1 and 2
b) 1 and 3
c) 2 and 3
d) 1, 2, and 3
Answer : d
Question 5 : Consider the following statements:
The Indian rupee is fully convertible
- In respect of current account transactions
- In respect of capital account transactions
- In respect of transaction of gold
Which of the statements given above are correct?
a) 1 only
b) 3 only
c) 1 and 2
d) 1, 2, and 3
Answer : a