An Expected Consequence of the Implementation of the North American

question 115

Multiple Choice

An expected consequence of the implementation of the North American Free Trade Agreement was

• A) low-skilled jobs would be moved out to Mexico resulting in lowering of average wage rates in the United States and Canada.
• B) increased imports from Mexico would help reduce the huge trade deficit for United States and Canada.
• C) lower incomes of the Mexicans would allow them to import fewer U.S. and Canadian goods, thereby decreasing demand.
• D) a large number of Mexican firms would hire low-skilled workers from the United States.
• E) some U.S. and Canadian firms would move production to Mexico to take advantage of lower labor costs.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been charged against an asset over its life up to a specific date.

Impairment Losses

Losses recognized when the carrying amount of an asset, or a cash-generating unit, exceeds its recoverable amount.

Productive Life

is the period during which an asset remains functional and can produce goods or services that are useful for the entity owning it.

Physical Nature

The tangible attributes or qualities of an asset, product, or substance, often influencing its valuation, use, and management.