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    Question

    The freedom to convert a country's domestic currency

    into foreign currency and vice versa, without any restrictions or limitations is known as _____________.
    A Free market currency Correct Answer Incorrect Answer
    B Demand Driven Currency Exchange Correct Answer Incorrect Answer
    C Supply driven Forex Exchange Correct Answer Incorrect Answer
    D Capital account convertibility Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Capital account convertibility refers to the freedom to convert a country's domestic currency into foreign currency and vice versa, without any restrictions or limitations. It allows individuals and institutions to move their money across borders, invest in foreign assets, and take profits or dividends from those investments back to their home country.

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