Questions and Answers
What term describes a ban or restriction on trade with another country?
embargo
Tariffs and subsidies are both types of what?
incentives
How do quotas help domestic producers?
Quotas facilitate the sale of more domestic goods
Which type of incentive makes it more profitable to follow a certain course of action?
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How do embargos most negatively affect a domestic market?
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Which of these is a positive incentive for domestic producers?
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On which country has the United States imposed an embargo since 1960?
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Study Notes
Trade Barriers Overview
- Embargo: A ban or restriction imposed on trade with a specific country, limiting international commerce.
- Incentives: Economic measures that encourage specific behaviors; includes tariffs and subsidies.
Types of Incentives
- Positive Incentives: Provide financial benefits that make a certain course of action more appealing, such as subsidies for domestic products.
Impact of Quotas
- Domestic Support: Quotas increase domestic sales by limiting the quantity of foreign goods allowed into the market, thus promoting local production.
Effects of Embargoes
- Domestic Market Challenges: Embargoes can significantly harm a domestic market by cutting off access to necessary foreign goods, limiting producers' capabilities and resources.
Specific Examples
- Examples of Positive Incentives: Financial support for domestic agriculture, like subsidies for growers of domestic oranges, encourages increased production and market stability.
- Cuba: The United States has maintained an embargo against Cuba since 1960, marking a long-standing trade restriction due to political and economic factors.
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Description
Test your knowledge on trade barriers with these flashcards. This quiz includes key terms and definitions related to embargoes, tariffs, quotas, and incentives. Perfect for anyone looking to understand trade policies better.
