Which of the following is NOT an obstacle to increased international economic integration?

• A. Reduction of trade barriers
• B. Exchange rate volatility
• C. Tariffs and quotas
• D. Political instability

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of international economic integration, which refers to the process where countries reduce barriers to trade and investment to allow for freer movement of goods, services, capital, and labor across borders.
2. Step 2: Identify common obstacles to increased international economic integration. These typically include factors that restrict or complicate cross-border economic activities, such as tariffs and quotas (which are direct trade barriers), exchange rate volatility (which creates uncertainty in international transactions), and political instability (which can deter investment and trade).
3. Step 3: Recognize that a reduction of trade barriers is actually a facilitator, not an obstacle, to international economic integration because it lowers costs and restrictions on trade between countries.
4. Step 4: Compare each option to determine which one does not hinder integration. Since tariffs and quotas, exchange rate volatility, and political instability all create challenges, they are obstacles.
5. Step 5: Conclude that the reduction of trade barriers is the correct answer because it promotes, rather than obstructs, international economic integration.