NECO 2004 Economics · Question 12

Which of the following will NOT be a barrier to international trade?

Options

  1. A.Communication hindrances
  2. B.Easy conversion of currencies
  3. C.Geographical locations
  4. D.Ideological differences
  5. E.Imposition of duties and quotas

Answer: B. Easy conversion of currencies

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question asks which option is NOT a barrier to international trade. A barrier is anything that makes it harder, costlier, or more restricted for countries to trade with one another.

Step 2: Concept Barriers to international trade include:

  • Natural barriers: distance, geographical location, language and communication problems.
  • Political and ideological barriers: differences in political systems or ideology, which may stop countries from trading.
  • Artificial (trade policy) barriers: tariffs (duties), quotas, embargoes, import licences.
  • Monetary barriers: different currencies, exchange controls, and difficulty converting currencies.

Step 3: Check each option

  • A. Communication hindrances: a barrier, because language and poor communication make deals harder.
  • B. Easy conversion of currencies: NOT a barrier. When currencies convert easily, payments between countries are simple. This encourages trade. The barrier would be difficulty in converting currencies.
  • C. Geographical locations: a barrier, because long distances raise transport costs.
  • D. Ideological differences: a barrier, because countries with opposing ideologies may restrict trade (for example, during the Cold War).
  • E. Imposition of duties and quotas: a barrier, since these are classic protectionist tools.

Step 4: Answer The only option that facilitates trade rather than hindering it is B. Easy conversion of currencies.

Exam tip: In "which is NOT" questions, look for the option that has a positive or helpful tone, such as "easy" or "free." Barriers are usually described with negative or restrictive words like "difficulty," "restriction," "duties," or "quotas."

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