A. reduce tariffs
B. increase subsidies on exports
C. increase tax on local industries
D. reduce personal income tax
Correct Answer: Option B
B. increase subsidies on exports
Explanation
Methods of correcting the 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
