The correct answer is C. Relaxing control mechanism.
Liberalization is the process of making the economy more open and competitive. This can be done by reducing government regulation, privatizing state-owned enterprises, and opening up the economy to foreign investment.
Reducing the number of industries would be the opposite of liberalization, as it would make the economy less open and competitive. Reducing competition would also be the opposite of liberalization, as it would give businesses less incentive to innovate and improve their products and services. Free determination of interest rates is not necessarily a sign of liberalization, as it can also be done in a controlled economy.
In conclusion, liberalization means relaxing control mechanisms and making the economy more open and competitive.