Which of the following correctly identifies the impact of the formation of NAFTA on Mexico?
A)Mexico's import of financial services and high-tech equipment from the U.S.has declined.
B)After Mexico joined NAFTA, the average wage rates for the unskilled workers have declined.
C)Mexican exports of fruits and vegetables to the United States declined substantially.
D)NAFTA allows Mexico to better exploit its comparative advantage based on low-skilled workers in such products as apparels, food crops, etc.

Question

Quizplus · Accepted Answer

The formation of NAFTA allowed Mexico to better exploit its comparative advantage based on low-skilled workers in such products as apparels, food crops, etc. This resulted in increased exports from Mexico to the United States, leading to economic growth in Mexico. However, it also led to a decline in wages for unskilled workers in Mexico. There is no evidence to suggest a decline in imports of financial services and high-tech equipment or exports of fruits and vegetables from Mexico as a result of NAFTA.

Which of the Following Correctly Identifies the Impact of the Formation