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Freedom to convert
Convert at market rate and
Removal of restrictions for conversion on current and capital account.
That is, liberalization of flows. It means convertibility for more purposes
(like FDI in retail); higher or no caps on existing convertibility regime
(49% FDI in insurance etc) and Indians being allowed greater freedom to
take their money abroad.
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2011
Q. Consider the following actions which the Government can take:
1. Devaluing the domestic currency.
2. Reduction in the export subsidy.
3. Adopting suitable policies which attract greater FDI and more
FIIs.
funds from
Which of the above action/actions can help in reducing the current account
deficit?
(a) 1 and 2
(b) 2 and 3
(c) 3 only
(d) 1 and 3
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