A recap of the effects of NAFTA for its first nine years reveals some adjustment costs were offset by:
A) increased exports of U.S. manufactured goods to China.
B) increased benefits for U.S. consumers due to expansion of varieties of imports from Mexico.
C) increased benefits for low-wage Mexican workers.
D) increased employment of low-skilled American workers.

Question

Quizplus · Accepted Answer

NAFTA led to an expansion of varieties of imports from Mexico, which increased benefits for U.S. consumers. While there were some adjustment costs, the expansion of trade allowed for more competition, lower prices, and increased consumer surplus. The other choices are incorrect as there is no correlation between NAFTA and increased exports of U.S. manufactured goods to China, increased benefits for low-wage Mexican workers, or increased employment of low-skilled American workers.

A Recap of the Effects of NAFTA for Its First