Agreements Like NAFTA and CAFTA

question 49

Multiple Choice

Agreements like NAFTA and CAFTA:

• A) not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights.
• B) do not include supplemental commitments like the FTAA does on labor and the environment to encourage countries to upgrade their working conditions and environmental protections.
• C) rely exclusively on MNCs exporting or setting up operations locally rather than buying out a domestic firm.
• D) provide firms with enough security so they cannot go out of business, which simply encourages a lack of efficiency or incentive to monitor costs.

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Definitions:

Short Run

A period in economics where at least one input is fixed while others are variable, affecting the level of output or production.

Personalized Sweaters

Sweaters that are customized to include specific designs, colors, or patterns, often featuring names, initials, or unique graphics chosen by the purchaser.

Average Variable Cost

Average Variable Cost is calculated by dividing the total variable costs of production by the quantity of output produced; it varies with production levels.

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power and price control by individual firms.