The common idea within American culture that “lol” means “laugh out loud” is an example of which of the following?

LOL, meaning "laughing out loud", is an example of an acronym.

Explanation:

An acronym is a word, made up of the initial letter of other words, pronounced as a single word.

We can see that LOL is an accronym formed by the initial letter of the words laughing out loud

A similar acronym is ROFL, rolling on the floor laughing, although in this case, the initial letter "t", of the word "the", is dropped.

Internet acronyms are very popular on the web, and new acronyms emerge almost on a daily basis.

A trade embargo is a law or policy a state initiates which prohibits or otherwise restricts the importation/exportation of goods. 

Limitations on imports do protect domestic industry. If I were to say, embargoes usually create positive results, particularly in this sector. First, it increases consumption of local goods. Second, as the consumption of local goods increases, so does the demand. To satisfy the growing consumer demand, domestic producers have to produce more products. This should lead to the creation of more jobs. Third, it enhances national security. The national security of a government that heavily imports military weapons can be compromised should the exporting country restrict the export of the weapons. To prevent this from happening, a government, especially that of a developed country, tries to encourage domestic production of defense equipment. It also adopts a trade embargo or bans the importation of the equipment. 

Embargoes, however, also reduces consumer choice. In many cases, businesses take advantage of the trade barriers and make cheap goods. Because the consumers have no other choice but to buy the more available domestic goods, they are forced to buy low quality goods.