Which of the following is one way in which an embargo differs from a tariff?
(1 point)
• It allows for free trade of goods.
• It limits the taxes placed on foreign goods.
• It bans all importation of foreign goods.
© It increases the price of foreign goods.
• It bans all importation of foreign goods.
The correct answer is that an embargo differs from a tariff because it bans all importation of foreign goods. An embargo is a complete prohibition on the trade of goods with a particular country, while a tariff is a tax that is placed on imported goods, which increases their price. Therefore, an embargo restricts the trade of goods entirely, while a tariff allows for the trade of goods but imposes additional costs on imported goods.
The correct answer is: "It bans all importation of foreign goods."
Now let's understand how to get to this answer by comparing an embargo and a tariff:
An embargo and a tariff are both trade policies, but they differ in their approach and objectives.
An embargo is a complete ban on the import or export of goods or trade with a particular country. It is often imposed due to political or economic reasons, such as a response to human rights violations or threats to national security. In other words, an embargo prohibits all trade with the targeted country, including the importation of their goods.
On the other hand, a tariff is a tax or duty imposed on imported goods. It is done to protect domestic industries and suppliers by making foreign goods more expensive and less competitive in the domestic market. The purpose of a tariff is to raise revenue for the government and also to provide protection to domestic industries from foreign competition. It does not ban the importation of foreign goods entirely but makes them more expensive for consumers by adding a tax on top of the original price.
Therefore, the correct answer is "It bans all importation of foreign goods" because an embargo completely prohibits any trade with a specific country, while a tariff imposes a tax on imported goods to make them more expensive but does not ban their importation altogether.