By joining NAFTA, the United States, Canada, and Mexico would find their short-run welfare decreasing due to the:
A. Economies of scale effect
Business investment effect
C. Trade creation effect
D. Trade diversion effect
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When Mexico became a part of NAFTA, along with Canada and the United States, it:
A. Eliminated traiffs against Canada and the United States but maintained them against nonmembers
B. Eliminated traiffs against Canada, the United States, and all nonmember countries
C. Increasedtraiffs against Canada the United States, and all nonmember countries
D. Increased traiffs against Canada and the United States, but did not change them against nonmember countries
Among the benefits that a regional trading arrangement can provide are all of these EXCEPT:
A. economies of large scale production
B. specialization fostering
C. attracting foreign investment
D. a shorter production time
Regarding the benefits of regional trade agreements, which of the following is NOT a benefit?
A. regional trade agreements may help manage immigration flows
B. regional trade agreements promote regional security
C. regional trade agreements may help lock in policy shifts towards market oriented reform
D. regional trade agreements may promota democracy
Smaller nations may seek safe haven trading arrangemants with larger nations when future access to that market seems uncertain. This was reason for the formation of:
A. WTO
B. GATT
C. NAFTA
D. none of these
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