What is the main purpose of an embargo?

Prepare for your UCF GEB3375 Intro to International Business Exam 1. Utilize flashcards and multiple choice questions with explanations to ace your test. Get fully equipped!

The main purpose of an embargo is to restrict trade with a country for political reasons. Embargoes are often implemented by governments to apply pressure on another nation, typically in response to actions that are deemed unacceptable, such as human rights violations, aggression, or other political conflicts. By prohibiting or limiting trade, the imposing country aims to affect the target nation’s economy and discourage certain behaviors or policies.

In contrast, allowing free trade between nations would promote economic exchange and collaboration rather than restriction. Increasing tariffs on imports is a different economic tool that can protect domestic industries but does not inherently involve a political motive aimed at a specific country. Encouraging foreign investment generally seeks to enhance economic relationships and development—an approach quite different from the isolationist strategy of an embargo. The defining characteristic of an embargo lies in its political implications rather than its economic effects alone.

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