Economics is all about the money!

Economic deals with the sales of goods and services.

This means that Economics deals with a lot of trade.

Trade is the buying and selling of goods and services.

People exchanging one thing for another.

Sometimes we have trade barriers to protect ourselves or others.

A trade barrier is the restriction or regulation of this exchange of goods and services between countries.

There are 3 different trade barriers we will learn this year:

Tariff, Quota, and Embargo

A tariff is a tax on goods or services being brought into a country.

Example: If I were to sell oranges in Canada, they may add a tariff on the oranges that I sell. So Canada they may add a $1 tax on each orange I sell there. This would make my oranges more expensive.

A quota is a fixed limit on the amount of goods and services a country can trade.

Example: Canada may limit the number of oranges I am allowed to sell there. They may do this to make sure that oranges sold buy Canadians will be bought too, not just mine.

An embargo is a ban on trade with a country.

Example: Canada could put an embargo on the United States which means I could no longer sell my oranges there.

Countries put embargoes on other countries if they don't like things they are doing or something that they believe.

An embargo is a ban on trade with a country.

Example: Canada could put an embargo on the United States which means I could no longer sell my oranges there.

Countries put embargoes on other countries if they don't like things they are doing or something that they believe.

A free trade zone is when there are no trade barriers like tariffs, quotas, or an embargo.

This doesn't mean you are getting things for free, it means that there are no limits or restrictions on trades being made.