You and the examiner were right to say 'false'. However, it's not a good fit for a true/false question.
In 1688, after the deposition of James II, the English parliament was divided in two groups, Tories and Whigs, whose political characteristics corresponded to the religious creed professed: Tories, conservatives, were Catholics; Whigs, liberals, were Anglicans.
Let's take these dichotomies one at a time.
Catholic/Anglican. The Whigs formed out of the Exclusionists, who wished to exclude the Catholic James II from succeeding his Anglican brother, Charles II. The Tories wished to keep James II as heir.
The Tories were not Catholics. Their two main principles were the divine right of kings, and pro-Church of England-ism. It's probable that any Catholics in England would have leaned towards the Tories, as the Whigs had nothing to offer them. However, the Tories as a group were Anglican. We could say that Catholics may have been relatively pro-Tory, but the Tories were definitely not pro-Catholic.
A few Tories probably joined or supported the Jacobites, but most of them resigned themselves to the rule of William of Orange after 1689, because William promised to preserve the independence of the Church of England from Rome (and did). Many were likely relieved, since it was feared James II would forcibly convert the country to Catholicism.
The Whigs were Anglicans, but more likely to favour toleration of Protestant dissenters, which they enacted in the Toleration Act when William came to power. William favoured extending toleration to Catholics as well, but the Whigs wouldn't let him, as they thought Catholics would use toleration as a cover to take over the country and kill people who wouldn't convert, per other European monarchs and Mary the I of England.
Conservative/Liberal. Where to start? Liberal like the Lib Dems, or the US Democrats, or the Japanese Liberal Democratic Party, or the German FDP, or William Gladstone, or... what?
For simplicity's sake, I'll assume the question refers to 19th century British liberalism: religious toleration, supremacy of parliament over the Crown, etc. So conservatism will be C-of-E-only-ism, and royal supremacy.
The Whigs favoured a more powerful parliament, and the Tories did not. To that extent the answer is clearly that the Whigs were more liberal.
In terms of religious toleration it's a bit more complicated. The Whigs favoured limited toleration for Protestant 'dissenters', including Quakers, etc. The Tories were against even this.
However, James II favoured toleration for all Christian denominations, including both Catholics and dissenters (see the 'Declaration of Indulgence'). Is it 'liberal' to depose a king who wants to extend toleration, and then to only extend it a tiny bit?