a. What is an embargo? b. Outline any three reasons for imposing tariffs on imports...

Explanation

a. Embargo is a trade restriction, typically adopted by a government, a group of countries or an international organization as an economic sanction.

b.

- Imposition of tariffs is a source of revenue to the government and newly established companies are protected from competition from foreign companies.

- If a country imports all sorts of goods without checks, it will suffer from unfavourable balance of trade and payments and dumping of goods, especially in non industrialized country will occur if the country allows free trade to happen.

- To check consumption pattern: if all sorts of goods are allowed to come into the country, the citizens will develop uncontrollable appetite for foreign goods and the rich are made to pay higher tax rate than the low income earner.

c.

- It limits the level of variety of goods available in the country and other countries may also retaliate.

- It may lead to increase in the price of goods especially if the tariff is too high.

- Fall in the standard of living due to high taxes on imports and very protection of domestic industries may lead to inefficiency.