Which of the following is not a measure for reducing balance of payment deficits?

A. export drive
B. reducing tariffs
C. adding to export goods
D. increasing local production

The Correct Answer: Option D

D. increasing local production

Explanation

Ways to reduce the balance of payment deficit

• Devaluation of the exchange rate (make exports cheaper – imports more expensive)
• Reduce domestic consumption and spending on imports (e.g. tight fiscal policy/higher taxes)
• Supply-side policies to improve the competitiveness of domestic industry and exports.