Which of the Following Statements Is True of Free Trade

question 51

Multiple Choice

Which of the following statements is true of free trade zones?

• A)Central American countries and the Dominican Republic (CAFTA-DR)is a free trade agreement between the U.S.and Europe that has resulted in greater exports of U.S.beef to Europe.
• B)North American Free Trade Agreement (NAFTA)is a free trade agreement between the U.S.,Canada,and Mexico that has reduced illegal migration of Mexicans to the U.S.
• C)Association of Southeast Asian nations (ASEAN)is a free trade agreement between the U.S.and a group of South Asian countries that has led to an increase in U.S.outsourcing to countries like India.
• D)Mercosur is a free trade association of Latin American countries that aims to increase export subsidies and domestic content requirements in each member country.
• E)The Trans-Pacific Partnership is a free trade association of South Africa and its four neighbouring countries.

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Definitions:

Return On Investment

A financial metric used to evaluate the efficiency or profitability of an investment, calculated by dividing the gain from the investment by its cost.

Absorption Costing

An approach to product costing that compounds all expenses involved in manufacturing, such as direct materials, labor costs, and all types of overheads, into the product’s final cost.

Markup

The discrepancy between the selling price and the production cost of a product or service, shown as a percentage of the production cost.

Return On Investment

A performance measure used to evaluate the efficiency of an investment or compare the efficiencies of several investments.