Why is NAFTA controversial? Briefly describe both sides of this controversy
What will be an ideal response?
Opponents of the agreement argue that increased trade with low-wage countries such as Mexico threatens American jobs, particularly in the manufacturing sector, where Mexican factories have a comparative advantage. American jobs are lost every time U.S. factories decide to relocate in Mexico. On the other hand, those in favor of the agreement generally make reference to the advantages of trade, such as lower costs of final goods to consumers, and the expansion of markets to sell American products.
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The economic problem is concerned with:
(a) Scarcity. (b) Disequilibrium. (c) Too much government intervention. (d) All of the above.
Typical estimates of the sacrifice ratio suggest that a one-percentage-point reduction in the inflation rate requires
a. a sacrifice of 5 percent of annual output. b. a sacrifice of 5 percent of government spending. c. an increase in the unemployment rate of 5 percentage points. d. a 5 percent increase in the government budget deficit.
When a falloff in usage of a product by some consumers causes others to stop purchasing the item there is
A. a dominant effect. B. a negative-sum game. C. a tit-for-tat feedback. D. negative market feedback.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point A to Point D. This could be explained by
A. an increase in economic growth. B. a change in society's preferences for motorcycles versus hybrid cars. C. a reduction in unemployment. D. an improvement in technology.