(a) State five reasons that would make a bank dishonor a customer’s cheque.
(b) State five reasons countries introduce restrictions in foreign trade.
Explanation
(a) Reasons a bank would honour a cheque:
i. When the amount written in figures does not correspond to the one in words.
ii. When the drawer's signature is different from the specimen captured when the account was opened.
iii. If the bank has been informed about the demise or insanity of the account holder.
iv. When a court of competent jurisdiction freezes the account (Garnishee order)
v. When the amount on the cheque is greater than the account balance.
vi. When the owner orders the bank to stop the payment of the cheque.
vii. If the cheque is not presented within a period of six (6) months.
viii. If there are alterations without the signature.
ix. If any of the essential features of a cheque is missing (Date, Signature and Payee).
x. If the cheque is mutilated.
xi. If the cheque is presented before the date written on it/post dated.
(b) Reasons countries introduce restrictions in foreign trade:
i. Countries restrict trade to protect their home/infant industries from the competition of more advanced industries abroad
ii. To enable local industries to expand and employ indigenes.
ii. Trade restriction, through the use of tariffs generates revenue for governments.
iv. Countries restrict foreign trade to improve their balance of payment with other countries.
v. Foreign trade restrictions are usually employed to preserve a country's foreign reserves.
vi. Countries may restrict trade as a retaliatory measure.
vii. Trade restriction is also used to reduce the demand for specific goods.
viii. To prevent dumping of goods from more established foreign firms.
ix. To prevent importation of harmful goods