What are 'economic sanctions'?

Economic sanctions refer to penalties or restrictive measures that one country imposes on another to influence that country's behavior. These sanctions can take various forms, including trade barriers, tariffs, or restrictions on financial transactions, aimed at compelling the targeted government to change a specific policy or to discourage certain actions considered unacceptable by the sanctioning country.

For instance, a country might impose economic sanctions in response to human rights violations, aggressive military actions, or non-compliance with international laws. By limiting access to markets, capital, and goods, these sanctions exert economic pressure, making it difficult for the targeted nation to function effectively in the global economy. Therefore, this approach is often viewed as a tool of foreign policy to promote compliance with international norms without resorting to military action.

In contrast, the other options present various economic concepts that do not align with the definition of economic sanctions. Tax incentives encourage investment but do not involve punitive measures. Trade agreements promote mutual economic benefits rather than impose restrictions. Protections for domestic businesses typically refer to measures like tariffs designed to shield local industries from foreign competition, which also doesn't encompass the idea of sanctions.