Guarantee to an exporter that the importer of his goods will pay immediately for the goods ordered by him, is known as

The correct answer is: A. Letter of Credit (L/C)

A letter of credit (L/C) is a document issued by a bank at the request of a buyer (the applicant) that assures the seller (the beneficiary) of payment upon the fulfillment of certain conditions. The L/C is a binding contract between the bank and the buyer, and the bank is obligated to pay the seller even if the buyer defaults on the purchase.

L/Cs are used in international trade to reduce the risk of non-payment. They are also used in domestic trade, especially for large or complex transactions.

Here are brief explanations of the other options:

• Inflation is a general increase in prices and a decrease in the purchasing value of money.
• Laissez-faire is an economic theory that advocates for minimal government intervention in the economy.
• None of the above is a correct answer to the question.