Which of the Following Key Provisions of NAFTA Restricts Japan

question 1

Multiple Choice

Which of the following key provisions of NAFTA restricts Japan from assembling autos in Mexico and avoiding U.S. or Canadian tariffs and quotas, unless the auto had a specific percentage of Mexican (i.e., North American) content?

• A) Services
• B) Standards
• C) Rules of origin
• D) Uniform customs procedures
• E) Government procurement

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Definitions:

Direct Labor Cost

The compensation and associated costs for workers directly engaged in the manufacturing of products or services.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and salaries of supervisors.

Total Manufacturing Costs

The sum of direct materials, direct labor, and manufacturing overhead incurred in producing goods.

Direct Labor Cost

The wages and salaries paid to employees who are directly involved in producing goods or providing services.