The Primary Purpose of NAFTA Is to

question 33

Multiple Choice

The primary purpose of NAFTA is to

• A) Encourage the development of the Mexican and Canadian economies at the expense of U.S. workers and consumers.
• B) Protect U.S. and Canadian workers from unfair competition from Mexico.
• C) Increase employment and income in Mexico, Canada, and the United States by encouraging free trade.
• D) Ensure that there are no losers as the result of trade agreements between Mexico, Canada, and the United States.

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Definitions:

Industry Entry

The process by which a new competitor or business enters into an industry, facing various barriers such as high startup costs, regulatory requirements, and competition.

Short Run

A period of time during which at least one of a firm's inputs is fixed and cannot be changed.

Normal Return

The minimum profit necessary to keep a company in business, equating to the opportunity cost of capital.

Own Capital

The funds or assets personally invested by the owners into a business, distinct from borrowed capital.