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

Analyze the question: We need the option that would NOT help improve a country's balance of payments (BOP). To improve the BOP, a country must raise export earnings and/or reduce import spending.

Concept: A BOP deficit is corrected by:

• Expenditure-switching policies (tariffs, import duties, quotas, anti-dumping measures)
• Export promotion (subsidies, removing export duties)
• Expenditure-reducing policies (higher taxes, cutting government spending, reducing disposable income so people buy fewer imports)

Step-by-step check of each option:

• A. Anti-dumping policies: These stop cheap foreign goods from flooding the local market. Imports fall, so BOP improves. ✔ (helps)
• B. Decreasing taxation on personal income: People keep more disposable income and spend more, including on imported goods. Imports rise, which worsens the BOP. ✘ (does not help)
• C. Granting subsidies to export producers: Lowers production costs and makes exports cheaper and more competitive abroad. Exports rise. ✔ (helps)
• D. Increasing import duties: Imports become more expensive and fall. ✔ (helps)
• E. Removing export duties: Exporters pay less, so exports become cheaper and more attractive. ✔ (helps)

Answer: Option B is the exception. Cutting personal income tax raises disposable income and import demand, which tends to worsen the balance of payments rather than improve it.

Exam tip: For "EXCEPT" questions, first decide what the goal is (here: more exports, fewer imports). Then look for the one option that pushes the opposite way. Anything that increases people's spending power (tax cuts, more money supply) tends to raise imports and hurt the BOP.