Most of the candidates who attempted this question were unable to define embargo correctly in the (a) part of the question, but demonstrated a good knowledge of the reasons for the imposition of import tariffs and reasons against the use of tariffs in the (b) and (c) parts of the question respectively. Candidates performed well in this question.

The candidates were expected to give the following answers to score maximum marks:

(a) An embargo is an outright ban instituted on the import or export of a good or service.

(b) (i) It is used to protect infant/local industries to be able to stand on their feet and expand.
(ii) It is a means of helping to increase employment in the home country.
(iii) It is a means of raising revenue for the imposing country.
(iv It helps countries with long-term balance of payments problems to correct them.
(v) It is a measure to control dumping.
(vi) It is used to control the consumption of products considered harmful.
(vii) It can be used as a retaliatory measure against other imposing countries.
(viii) To restrict trade with /act as a sanction against some unfriendly countries.
(ix) For strategic reasons e.g. national security.

(c)  (i) It can lead to possible retaliation from affected countries.
(ii) Protection of local firms do not encourage them to grow, they produce low standard goods since there is little or no competition.
(iii) It may lead to loss of revenue for the imposing country depending on the elasticity of demand for imports and exports.
(iv) It can lead to smuggling of products considered harmful and also of other products to evade tax.
(v) Consumers in the home country are denied the opportunity of choosing from a variety of imports.
(vi) It may lead to contraction of total world output.
(vii) It can cause increase in prices in affected countries/ high cost of living/ low standard of living.