The North American Free Trade Agreement (NAFTA)

question 116

Multiple Choice

The North American Free Trade Agreement (NAFTA) :

• A)resulted from GATT negotiations at the Uruguay Round.
• B)permits the European Union to export goods tariff free to North America.
• C)has eliminated most of the tariffs and other trade barriers among Canada, Mexico, and the United States.
• D)will reduce American exports to Mexico.

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Definitions:

Capital Goods

Physical assets used by businesses to produce goods and services, such as machinery, buildings, and equipment.

Investment

In economics, spending for the production and accumulation of capital and additions to inventories.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over time.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a given budget at set prices.