Final answer:
True, Differences in language and national character do function similarly to trade barriers by hindering communication and influencing consumer.
Step-by-step explanation:
The statement that differences in language and national character have similar effects as trade barriers is true. These cultural differences can hinder the free flow of trade as effectively as traditional trade barriers like tariffs and quotas. Communication barriers owing to language differences can lead to misunderstandings, mistrust, and reduced willingness to engage in trade.
Additionally, the national character, which encompasses a country's preferences, ideologies, and values, can result in resistance to foreign products that do not align with local expectations or norms. This can become an informal trade barrier, influencing consumer behavior and effectively protecting domestic industries.
For example, while tariffs directly increase the cost of imported goods, language barriers can raise transaction costs, and a mismatch between consumer preferences and product characteristics can limit product adoption, causing an indirect but substantial impact on trade.