suggestions to improve the Balance of Payment of Country?

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Expert Solution

Balance of payments is the transectional receipts of an economy which takes place with other countries. Mostly the countries experience a deficit in balance of payment levels. Although deficit in BoP is a good sign for a moving economy but it must be taken into consideration that , since BOP is the statement for financial condition of an economy, it must be Target as high as posible.

Following steps can be taken in order to improve BOP in economy. :

1.most important step is to devalue the domestic currency. Devaluation leads to rising imports of domestic goods in the international market. Hence this creates a surplus is balance of trade, which is one the most important element of BOP.

2. New fiscal trends like spending on imports by increasing tax rates can also help show a reduction in BoP deficit.

3. High investments in domestic markets can rise the levels of investments made within the domestic market which will increase the BOP for a Market.

Rahul Sunny answered 4 weeks ago

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