How can the government correct an adverse balance of payments through

1.	How can the government correct an adverse balance of payments through the following measures: (i) Export promotion. (ii) Import control.
Answer» The government can correct the adverse Balance of Payment through the following measures. Export Promotions: The Government of the country having adverse BOP stimulate exports by reducing export duties, giving subsidies and cash assistance to exporters, providing technical and marketing assistance to export-oriented units, providing facilities like quality control, arranging exhibitions of exportable goods, exempting export goods from taxes, etc. Attempts should be made to attract foreign tourist to encourage tourism. All these measures will increase the volume of exports thereby reducing the deficit in the BOP. Import Control: To check imports, the Government can impose quota limits may increase import duties or tariffs. This will discourage imports, making BOP favourable.

How can the government correct an adverse balance of payments through the following measures: (i) Export promotion. (ii) Import control.

Answer»

The government can correct the adverse Balance of Payment through the following measures.

Export Promotions: The Government of the country having adverse BOP stimulate exports by reducing export duties, giving subsidies and cash assistance to exporters, providing technical and marketing assistance to export-oriented units, providing facilities like quality control, arranging exhibitions of exportable goods, exempting export goods from taxes, etc. Attempts should be made to attract foreign tourist to encourage tourism. All these measures will increase the volume of exports thereby reducing the deficit in the BOP.

Import Control: To check imports, the Government can impose quota limits may increase import duties or tariffs. This will discourage imports, making BOP favourable.

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