Which of the Following Is an Expected Consequence of the Implementation

question 22

Multiple Choice

Which of the following is an expected consequence of the implementation of the North American Free Trade Agreement?

• A)Low-skilled jobs will be moved out to Mexico resulting in lowering of average wage rates in the United States and Canada.
• B)Increased imports from Mexico will help reduce the huge trade deficit for United States and Canada.
• C)Lower incomes of the Mexicans would allow them to import fewer U.S.and Canadian goods,thereby decreasing demand.
• D)A large number of Mexican firms will hire low-skilled workers from the United States.
• E)Some U.S.and Canadian firms would move production to Mexico to take advantage of lower labor costs.

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Definitions:

Market Value

The ongoing price for buying or selling an asset or service in the market.

Dilution

The reduction in existing shareholders' ownership percentage of a company as a result of the company issuing new shares.

Shareholder Value

The value delivered to shareholders due to management's ability to grow earnings, dividends, and share price.

Market Value

The existing exchange rate for assets or services in the marketplace.