Question

What is one way that a negative trade balance can be converted into a $0 balance of payments? A) The use of import quotas B) The imposition of tariffs C) The negotiation of trade agreements D) The funding of public works projects

Answer 1

Option B, The imposition of tariffs, is the right answer.

Step-by-step explanation:

A tariff is a kind of economic tool that is used to balance international trade. It is a tax that is imposed over the import or export of goods and services. If a country wants to increase its export then it must remove the tariff from export. If a country wants to decrease its import then it must tariff on import because imposing a tariff on imports will make the import costly. Therefore, a decrease in imports will help to achieve a zero balance of payment.