(L-R) President of the European Council Herman van Rompuy, Canadian Prime Minister Stephen Harper, French President Francois Hollande, British Prime Minster David Cameron, U.S. President Barack Obama, German Chancellor Angela Merkel, Japanese Prime Minister Shinzo Abe, Italian Prime Minister Matteo Renzi and President of the European Commission Jose Manuel Barroso attend a meeting of the G7 leaders in The Hague, Netherlands. The G7 countries are meeting to discuss the recent developments in Ukraine, and to consider their response and any sanctions to be imposed upon Russia in answer to its annexing of the Crimea region.
(L-R) President of the European Council Herman van Rompuy, Canadian Prime Minister Stephen Harper, French President Francois Hollande, British Prime Minster David Cameron, U.S. President Barack Obama, German Chancellor Angela Merkel, Japanese Prime Minister Shinzo Abe, Italian Prime Minister Matteo Renzi and President of the European Commission Jose Manuel Barroso attend a meeting of the G7 leaders in The Hague, Netherlands. The G7 countries are meeting to discuss the recent developments in Ukraine, and to consider their response and any sanctions to be imposed upon Russia in answer to its annexing of the Crimea region. - 
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The word sanctions gets tossed around a lot. The U.S. has sanctions on Iran, Russia, and even Cuba dating back to the Cold War. It's the go-to way to isolate and starve a bad actor, using money.

This week, the U.S. and the E.U. tightened the screws on Russia with even more sanctions.

So how do these things work, anyway?

To find out we met up with economist Sheryl King, director at Roubini Global Economics, outside the United Nations to explain their global impact.

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Follow Lizzie O'Leary at @lizzieohreally