The correct answer is: A. Promoting import substitution.
Import substitution is a trade policy that aims to reduce a country’s reliance on imported goods and services by developing domestic production of those goods and services. This can be done through a variety of measures, such as tariffs, quotas, and subsidies.
Import substitution can be a successful way to improve a country’s balance of payments. When a country reduces its imports, it also reduces its outflow of foreign currency. This can help to improve the country’s trade balance and its overall balance of payments.
However, import substitution can also have some negative consequences. It can lead to higher prices for consumers, as domestic producers may not be able to produce goods and services as efficiently as foreign producers. It can also lead to a loss of competitiveness in the global market, as domestic producers may not be able to compete with foreign producers on price or quality.
Overall, import substitution can be a successful way to improve a country’s balance of payments. However, it is important to weigh the potential benefits and costs of import substitution before implementing it.
Here is a brief explanation of each option:
- A. Promoting import substitution is a trade policy that aims to reduce a country’s reliance on imported goods and services by developing domestic production of those goods and services. This can be done through a variety of measures, such as tariffs, quotas, and subsidies.
- B. Emphasis on exports is a trade policy that aims to increase a country’s exports. This can be done through a variety of measures, such as providing subsidies to exporters, negotiating trade agreements with other countries, and devaluing the currency.
- C. High octroi on imports is a tax that is levied on imported goods. This can increase the price of imported goods, which can make them less competitive with domestically produced goods.
- D. Devaluation of money is a decrease in the value of a country’s currency relative to other currencies. This can make exports more competitive, as they will be cheaper for foreign buyers. However, it can also make imports more expensive, as they will cost more in domestic currency.