Discussion
Removal of restrictions on payments relating to import and exports of goods, services and factor income is called as :
Answer: C
It is called current account convertibility.
Current account convertibility means that domestic currency can be freely exchanged for foreign currency for current transactions: payments for imports and exports of goods and services, and remittances of factor income such as interest, dividends and wages. India made the rupee convertible on the current account in August 1994, accepting the obligations of Article VIII of the IMF's Articles of Agreement. Capital account transactions remain regulated.
Trade liberalisation and free trade concern tariffs and quotas on goods, not the freedom to make payments, and trade promotion means measures to boost exports. None of them is the name for removing restrictions on current payments.
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