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Chapter 8: Problem 6

Statement I: The European Union was formed as a trading counterweight to NAFTA. Statement II: Since the formation of NAFTA, the United States has lost millions of jobs to Mexico. (L.O7) a) Statement I is true, and statement II is false. b) Statement II is true, and statement I is false. c) Both statements are true. d) Both statements are false.

Short Answer

Expert verified
b) Statement II is true, and statement I is false.

Step by step solution

01

Understand the European Union (EU) and North American Free Trade Agreement (NAFTA)

The European Union (EU) is a political and economic union of 27 European countries established to promote peace, stability, and prosperity within Europe. The EU has a single market, with a standardized system of laws that applies to all member countries regarding trade, agriculture, and regional development. The North American Free Trade Agreement (NAFTA) is a trade agreement between the United States, Canada, and Mexico that has eliminated tariffs, duties, and restrictions on the trade of goods and services among these three countries. NAFTA was designed to encourage economic growth and cooperation among the member nations.
02

Assess the truth of Statement I

Statement I: The European Union was formed as a trading counterweight to NAFTA. Although both the EU and NAFTA involve trade agreements, the primary purpose of the EU was to promote peace, stability, and prosperity within Europe, not solely to counterbalance NAFTA. Therefore, Statement I is false.
03

Assess the truth of Statement II

Statement II: Since the formation of NAFTA, the United States has lost millions of jobs to Mexico. This statement is true. While one of the goals of NAFTA was to stimulate economic growth and create jobs, the competitive advantages of lower wages in Mexico have led to the movement of many manufacturing jobs from the US to Mexico.
04

Choose the correct answer based on the findings

Based on our analysis of the statements: - Statement I is false - Statement II is true The correct answer is: b) Statement II is true, and statement I is false.

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Most popular questions from this chapter

Which one of these is the most accurate statement that can be made about the issue of buying a product that is made with sweatshop labor? (LO7) a) All products made with sweatshop labor should be boycotted. b) Everyone should be encouraged to buy products made with sweatshop labor. c) Virtually all the goods we import are made with sweatshop labor. d) Although wages in sweatshops are very low, they are generally higher than workers could earn in other jobs.

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\(\mathrm{GI} P=\mathrm{C}+\mathrm{I}+\mathrm{G}+\mathrm{X}_{\mathrm{n}}\). If \(\mathrm{X}_{\mathrm{n}}\) were not included, our GDP would be (LO5) a) higher b) about the same c) lower

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