NAFTA Is in Which Stage of the Economic Integration Process

question 50

Multiple Choice

NAFTA is in which stage of the economic integration process?

• A) First stage (free trade area)
• B) Second stage (customs union)
• C) Third stage (common market)
• D) Fourth stage (economic union)
• E) Fifth stage (political union)

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Definitions:

Commercial Substance

A situation where the future cash flows of an entity change as a result of a transaction, indicating the transaction has economic significance.

Original Cost

The initial purchase price or construction cost of an asset or investment, before depreciation or amortization.

Units-of-production

An approach to depreciation that apportions the price of an asset throughout its functional life, contingent on the total units it generates.

Salvage Value

The forecasted residual valuation of an asset at the termination of its utility life.