ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Embargoes. Embargoes are outright prohibition of trade in certain commodities. As well as quotas, embargoes may be imposed on imports or exports of particular goods in respect of certain goods supplied to or from specific countries, or in respect of all goods shipped to certain countries.

Detailed explanation-2: -The most direct barrier to trade is an embargo– a blockade or political agreement that limits a foreign country’s ability to export or import. Embargoes still exist, but they are difficult to enforce and are not common except in situations of war. The most common barrier to trade is a tariff–a tax on imports.

Detailed explanation-3: -An embargo (from the Spanish embargo, meaning hindrance, obstruction, etc. in a general sense, a trading ban in trade terminology and literally “distraint” in juridic parlance) is the partial or complete prohibition of commerce and trade with a particular country/state or a group of countries.

Detailed explanation-4: -Tariffs cause the consumer to pay a higher price for an imported item, increasing the demand for a lower-priced item produced domestically. Quotas are limits on the amount of a good that can be imported into a country. Quotas can cause shortages that cause prices to rise. Embargoes forbid trade with another country.

Detailed explanation-5: -Embargoes occur when one country bans trade with another country. This can be limited to one specific good like oil or can include all goods from a specific country. Embargoes are relatively rare, but the U.S. imposed a trade embargo on Cuba in 1962.