5
QuizMultiple Choice

Trade and Development — Test

Question 5 • Economics and Personal Finance

What do quotas and embargoes have in common?

Answer
A
They both frequently result in domestic shortages.
B
They both tend to raise prices.
C
They both affect imports from certain countries.
D
They both set limits on imported goods.

Explanation

A quota sets a maximum amount of a good that can be imported. An embargo prohibits trade in certain goods or with certain countries, effectively setting the allowed imports to zero. Both restrict imported goods, so D is correct.

AI-written and checked against the verified answer.

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