As a result of the North America Free Trade Agreement (NAFTA), the United States and Canada have shifted to free trade with Mexico. It is assumed that Mexico has an abundance of unskilled labor while the United States and Canada have an abundance of skilled labor. According to the Stolper-Samuelson theorem, how this shift will affect the real wage of unskilled labor in Mexico and the real wage of unskilled labor in the United States and Canada? Also explain the impact on the real wage of skilled labor in Mexico and skilled labor in the United States and Canada.

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The Answer of As a result of the North America Free Trade Agreement (NAFTA), the United States and Canada have shifted to free trade with Mexico. It is assumed that Mexico has an abundance of unskilled labor while the United States and Canada have an abundance of skilled labor. According to the Stolper-Samuelson theorem, how this shift will affect the real wage of unskilled labor in Mexico and the real wage of unskilled labor in the United States and Canada? Also explain the impact on the real wage of skilled labor in Mexico and skilled labor in the United States and Canada.

As a Result of the North America Free Trade Agreement