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.
To determine the way in which an embargo differs from a tariff, let's understand the definitions of these two terms.
An embargo is a government-imposed restriction on the trade of certain goods with specific countries. It bans or restricts all importation, exportation, or both, of goods and services with the targeted countries.
On the other hand, a tariff is a tax or duty imposed by a government on imported or exported goods. It's usually designed to protect domestic industries by making foreign goods more expensive or less competitive.
Now, let's analyze the options provided:
1. It allows for free trade of goods: This option does not accurately describe an embargo. Embargoes restrict or ban trade rather than allowing for free trade.
2. It limits the taxes placed on foreign goods: This option does not accurately describe an embargo either. Embargoes are not related to taxes on foreign goods, but rather involve a complete or partial ban on trade.
3. It bans all importation of foreign goods: This option accurately describes an embargo. An embargo involves banning the importation (and sometimes exportation) of goods with specific countries.
4. It increases the price of foreign goods: This option accurately describes a tariff. Tariffs are designed to increase the price of foreign goods, making them less competitive compared to domestically produced goods.
Therefore, the correct answer is: It bans all importation of foreign goods.