In order to correct adverse balance of payments problem, government should?
- reduce tariffs
-
increase subsidies on exports
- increase tax on local industries
- reduce personal income tax
The correct answer is: B
Explanation
Methods of correcting adverse balance of payments
Well- known Methods of Correcting in Adverse Balance of Payment
- Trade Policy Measures: Expanding, Exports and Restraining Imports
- Expenditure-Reducing Policies
- Tight Monetary Policy
- Contractionary Fiscal Policy
- Expenditure – Switching Policies: Devaluation
- Devaluation: Marshall Lerner Condition