Page 114 - Macroeconomics. book docx_Neat

- Quotas: Limits on the quantity of imports.

- Export subsidies: Financial support for exporters.

- Exchange rate policies.

- Trade agreements.

Foreign Sector Policies in Macroeconomics

Governments use different policies to manage the foreign sector:

a. Trade Policy

Encouraging exports through subsidies

Limiting imports through tariffs or quotas

Promoting domestic industries

b. Exchange Rate Policy

Devaluation to encourage exports

Appreciation to reduce import costs

c. Balance of Payments Policy

Reducing trade deficits

Stabilizing foreign reserves

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