Deck 13: The United States in the World Economy

Question 1

The single most important reason for Canada's seeking a free trade agreement with the United States was to

A)ensure its access to the U.S.market.
B)ensure its ability to join NAFTA.
C)harmonize its environmental laws with the United States.
D)avoid international outsourcing in low wage countries.
E)ensure the continuation of its social programs.

Answer 1

A

Question 2

One problem with NAFTA that is not shared by other trade blocs is that

A)national environmental laws differ greatly.
B)the countries are at very different stages of economic development.
C)the countries speak different languages.
D)the countries are not natural trading partners.
E)the United States and Mexico have a history of conflict.

Answer 2

B

Question 3

One area of labor issues that the labor side agreement to NAFTA does not open to foreign consultation or investigation is

A)the use of child labor.
B)worker exposure to unsafe conditions.
C)minimum wages.
D)worker's rights to organize.
E)worker exposure to toxic hazards.

Answer 3

D

Question 4

Twenty-four years before CUSTA,another agreement between the same countries covered trade in

A)textiles.
B)steel.
C)autos.
D)agriculture.
E)telecommunications.

Question 5

Which of the following is most important in determining the number of jobs in an economy?

A)Macroeconomic policies
B)Trade policies
C)Urban policies
D)Environmental policies
E)Tax policies

Question 6

A slowing U.S.economy and increased enforcement of immigration laws will reduce ________ factors for Mexican immigration to the United States.

A)demand growth
B)demand pull
C)supply push
D)supply growth
E)network

Question 7

What lessons did Mexico's policy makers learn from the 1980s debt crisis? What reforms did President Salinas pursue? What were his main goals?

Question 8

Purchasing power parity (PPP)measurements of income are a way to make international comparisons by correcting for national differences in

A)unemployment.
B)inflation.
C)prices of goods and services.
D)economic growth.
E)government subsidies.

Question 9

Describe the trends in U.S.manufacturing employment and U.S.manufacturing output over the last 40 years.What factors have contributed to these?

Question 10

The main area of economic activity that Canada chose not to open to free trade is

A)agriculture.
B)oil and gas.
C)lumber.
D)the cultural industries.
E)financial services.

Question 11

Most Mexican workers can increase their wages if they migrate to the United States,a demand-pull factor for migration.

Question 12

Few countries have a higher GDP per capita than the weighted average of Canada,Mexico and the U.S.

Question 13

Which of the following is NOT a reason Mexico and Canada wanted a free trade agreement with the United States?

A)Mexico wanted increased direct foreign investment.
B)Canada wanted to guarantee access to the U.S.market.
C)Mexico wanted the United States to lower its high barriers to Mexican products.
D)Canada wanted its firms to become more globally competitive.
E)Mexico wanted to institutionalize its economic reforms.

Question 14

Even though Mexico is a developing country,the NAFTA market is very rich.

Question 15

In Canada,there are no preferences given to Canadian tv networks and programming over U.S.networks and programming.

Question 16

Free trade agreements between the United States and Canada started with the auto industry in the year 1965.

Question 17

Why is the U.S.putting less emphasis on multilateral and more emphasis on bilateral trade agreements?

Question 18

Under NAFTA,environmental standards are

A)harmonized around Mexican rules.
B)harmonized around U.S.rules.
C)harmonized around Canadian rules.
D)harmonized around a combination of the rules in all three countries.
E)not harmonized.

Question 19

U)S.opponents of NAFTA argued that the agreement will hurt the United States.In their view,NAFTA's greatest harm will be its

A)harmonization of labor policies.
B)harmonization of environmental policies.
C)harmonization of the use of pesticides and herbicides.
D)job destruction and downward pressure on U.S.wages.
E)harmonization of product safety standards.

Question 20

President Salinas of Mexico devised a strategy to restore Mexican growth by encouraging

A)large inflows of foreign capital.
B)large increases in domestic savings.
C)large interest rate cuts.
D)an expansion of import substitution industrialization policies.
E)more government ownership of industrial firms.

Question 21

What is the United States primary trade promotion initiative with Africa?

Question 22

Why are trade agreements between the U.S.and Mexico more controversial than trade agreements between the U.S.and Canada?

Question 23

What type of economic policy did Mexico follow from the end of World War II until the 1980s? Describe the three-stage strategy that supporters of this policy emphasized.What was the outcome of these policies for Mexico's manufacturing sector?

Question 24

What two trends was Canada trying to address in negotiating CUSTA?

Question 25

What are bilateral investment treaties?

Question 26

When did NAFTA go into effect?

Question 27

What is the main problem with rules of origin?

Question 28

In negotiating NAFTA,what two side agreements were reached?

Question 29

What is the significant feature of a preferential arrangement?

Question 30

One reason why most economists forecast that the effects of NAFTA on the U.S.economy would be small is because

A)NAFTA does not bring down tariffs far enough.
B)the Mexican economy is small relative to the U.S.economy.
C)NAFTA trade opening provisions only cover a handful of sectors.
D)Mexico was not expected to live up to its obligations under the agreement.
E)the United States was not expected to live up to its obligations under the agreement.