Answer-A developing country is facing a balance of payments (BoP) crisis due to persistent trade deficits a...

A BoP crisis occurs when a country imports more than it exports , depleting foreign reserves. Raising tariffs discourages imports , reducing trade imbalances. Printing more currency B would worsen inflation . Foreign borrowing C increases debt burden but does not fix trade deficits .

Question

A developing country is facing a balance of payments (Bo

P crisis due to persistent trade deficits and declining foreign exchange reserves. Which of the following policy measures would be most appropriate to address this issue?

A Increasing tariffs on imports to reduce trade deficits

B Printing more domestic currency to finance imports

C Encouraging foreign borrowing to cover the deficit

D Increasing government spending to boost domestic consumption

E Reducing exports to balance trade