The following can be used to improve a country's balance of payment EXCEPT

Analyze the question: We need the option that would NOT improve a country's balance of payments (BOP). Improving the BOP means increasing export earnings and/or reducing import spending, so the trade balance and current account move toward surplus.

Concept: Policies that help the BOP:

• Boost exports (e.g., subsidies, export promotion)
• Restrict or reduce imports (e.g., tariffs, quotas, anti-dumping measures)
• Reduce domestic demand for imports (e.g., higher taxes, which cut disposable income and spending)

Step-by-step check of each option:

• A. Anti-dumping policies: These protect local industries from cheap foreign goods, reducing imports. This improves the BOP.
• B. Granting subsidies to export producers: Lower production costs make exports cheaper and more competitive, so export earnings rise. This improves the BOP.
• C. Decreasing taxation on personal income: People keep more income, disposable income rises, and consumption rises, including spending on imported goods. Imports increase, which worsens (or at least does not help) the BOP. This is the exception.
• D. Increasing import duties: Imports become more expensive, so demand for them falls. This improves the BOP.

Answer: The policy that does not improve the BOP is decreasing taxation on personal income, which is option C.

Exam tip: For "EXCEPT" questions on BOP, ask: "Does this raise exports or cut imports?" Anything that increases people's spending power (tax cuts, higher wages, easier credit) tends to pull in more imports, so it is likely the odd one out.