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Which of the following measures is not likely to help in improving India's balance of payments position?

  1. A
    Devaluation of the rupee
  2. B
    Encouragement of import substitutions
  3. C
    Imposition of higher duty on imports
  4. D
    Imposition of higher duty on exports

Solution & Step-by-step Explanation

Imposing higher duties on exports makes domestic products more expensive and uncompetitive in international markets, which decreases total export volume and hurts the Balance of Payments (BOP). Conversely, devaluation of currency, import substitution, and import tariffs help curb imports or boost exports, improving the BOP situation.

Practice this question

Try it yourself before checking the explanation above.

Which of the following measures is not likely to help in improving India's balance of payments position?
A
Devaluation of the rupee
B
Encouragement of import substitutions
C
Imposition of higher duty on imports
D
Imposition of higher duty on exports

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Balance of PaymentsTrade PolicyInternational Economics

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