Which of the Following Is NOT True of the North

question 48

Multiple Choice

Which of the following is NOT true of the North American Free Trade Agreement (NAFTA) as it relates to Mexico?

• A) The reduction of trade barriers has led to a more evenly balanced level of trade between Mexico and the United States.
• B) Domestic producers worry about competition from U.S. firms.
• C) It has meant that the fate of the Mexican economy has become increasingly tied to the American economy.
• D) It has led to fears of "cultural imperialism."
• E) Free trade entails a loss of sovereignty for Mexico.

---

Definitions:

Long-Run

A period of time in which all factors of production and costs are variable, allowing for complete adjustment to change.

Market Entry

The process by which a company or business begins to participate in a new market, facing existing competitors and regulations.

Normal Return

The minimum profit necessary for a company to remain viable in its industry, often considered the opportunity cost of capital.

Own Capital

The value of the assets owned by a company or individual that are used in the production process or for investment purposes.