Bachelor of General Studies (BGS) Degree Practice Exam

What term describes government orders against companies doing business in another country due to ethical concerns?

1. Trade embargoes

2. Economic sanctions

3. Tariffs

4. Quotas

The correct answer is: Economic sanctions

Economic sanctions refer to restrictions imposed by a government on another country or specific entities within that country, typically aimed at influencing policy or expressing disapproval over certain behaviors, including ethical concerns. These sanctions can take various forms, such as asset freezes, trade restrictions, and bans on specific interactions. In the context of the question, these sanctions can be directed at companies operating in other countries to address issues such as human rights violations, corruption, or other unethical practices. The purpose is to create pressure for change without resorting to military action. Trade embargoes, while similar in that they restrict trade with a specific country, specifically denote a prohibition on commerce altogether with that nation. Tariffs are taxes imposed on imports or exports that create a financial barrier to trade, while quotas restrict the quantity of goods that can be traded, neither of which directly address ethical concerns in the same manner as economic sanctions do.