Which of the Following Is True of the North American

question 18

Multiple Choice

Which of the following is true of the North American Free Trade Agreement?

• A) The United States, Mexico, and Canada agreed to buy certain products exclusively from nations in South America in an effort to ease their debt burdens.
• B) It ended the trade war between Japan and the nations of North America.
• C) It lowered trade and investment barriers between the United States, Mexico, and Canada.
• D) It established a free trade zone between the nations of North America and the European Economic Community.

---

Definitions:

Price Floor

A government or group-imposed limit on how low a price can be charged for a product, usually above the equilibrium price, to protect producers.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity, intended to protect consumers from high prices.

Equilibrium

A state in a market where supply equals demand, with the selling price of goods remaining constant as long as other variables remain unchanged.

Price Floor

A government-imposed minimum price below which a certain good cannot be sold.