Step 1: Read the term.
We need the correct meaning of liberalization in the economy.
Step 2: Basic idea.
Liberalization means freeing the economy from heavy government control. The rules become more flexible and more market friendly.
Step 3: What changes.
The government removes many restrictions and licences. Private companies are allowed to enter and run businesses in fields that were once closed to them.
Step 4: Why it is done.
The aim is more competition, faster growth, more investment, and better services for people.
Step 5: Test the options.
More taxes, more import restrictions, and more limits on foreign investment are the opposite of freeing the economy, so they are wrong.
Step 6: Pick the answer.
Liberalization means opening many sectors of the economy to private investors.
\[ \boxed{\text{Opening of many sectors of the economy to private investors.}} \]