Concept: An adverse balance of payments means imports exceed exports, so the government must boost exports and reduce imports.
Explanation:To correct an adverse balance of payments, the government should encourage exports to earn more foreign exchange.
Increasing subsidies on exports makes exported goods cheaper and more competitive in foreign markets.
This leads to a rise in export earnings, which helps reduce the trade deficit.
Reducing tariffs and lowering taxes would increase imports, making the problem worse.
Answer:The correct option is B. increase subsidies on exports.