Tariff is a tax on imports. It’s made to make foreign goods have a higher price than goods made in the taxing country. Example: The U.S. put a tariff on imports from Europe, which makes people buy more U.S. goods than European goods because U.S. items are cheaper. A quota is when you set a limit on the imports from a certain country. So then, you don’t have a lot of foreign goods. When foreign goods run out, people have to buy goods made in their own country. An embargo is when you completely stop trade with a country. They can no longer trade with that country, usually for political reasons. That means nothing gets exported to that country and nothing gets imported from that country. 
    Most of the time people get confused with quota and embargo and think they're the same. Well, they aren’t. A quota only limits the amount, where an embargo cuts off trade completely. Tariff and quota often get confused, too. A tariff is only putting a tax on imports, so the importing country gets more of the money. Quota is the opposite, that importing country gets less goods and no money and the country that is exporting goods gets less money.

 

 

 

    

     

In the picture above it represents economic growth.                                                                                                                                                                

 

     The four main economic systems, market, command, traditional, and mixed all decide what is produce, how it is produced, and for whom is it produced for (the three economic questions). In a market economy the people and small businesses decide the three economic questions.  In a command economy the government decides the three economic questions. A traditional economy uses the same methods that their ancestors did to answer the three economic questions.  Last, in a mixed economy the people and the government decide the three economic questions. All economic systems are mixed between market and command. You can’t mix traditional with market or command so it is separate. Those are the four main economic systems.

Let’s use Pizza Hut as an example.   There are several jobs involved in making your pizza.  You want to order a pizza from a chef, because the chef has the experience and the tools to make the pizza. Unfortunately, the chef doesn’t have the resources to make pizza by himself, so the men that bring supplies to the restaurant get the resources for him from farms, ranches, etc.  Without the natural resources, the chef wouldn’t be able to make pizza, and without the chef’s tools and expertise, the supplies from the other places would go to waste.  This is an example of specialization encouraging trade.

International trade, however, is far more complicated than it seems.  Most countries have different forms of currency, which can make trade difficult.  Our country, the United States, uses the U.S. dollar, and Russia uses rubles. Countries that don’t have the same currency (Most European countries have adopted the EU's Euro) can’t trade with each other.  That’s why there are exchange rates.  Exchange rates are the rates at which one country’s currency trades for another.  These rates are affected by the worth of one country’s currency compared to another.  Right now, the dollar is currently worth less than 1% more than Russia’s rubles.  These exchange rates are important to international trade.  They allow other countries to exchange goods and services without getting ripped off.