H. Ross Perot's famous claim in 1992 that the North American Free Trade Agreement (NAFTA) would cause a "great sucking sound" referred to
A. a rapid increase in U.S. exports to Mexico.
B. a huge increase in foreign direct investment in the United States.
C. a rapid increase in the wage inequality in Mexico.
D. an instant shift of jobs from the United States to the Mexico.
Answer: D
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A retired worker receives a pension that is not indexed to inflation. Which of the following will happen if the rate of inflation rises?
A) The retiree's purchasing power will fall. B) The shareholders of the firm in which he worked will lose. C) The retiree's purchasing power will increase. D) The retiree will be better off.
When the world price of the traded good is lower than the domestic no-trade equilibrium price, free trade causes domestic production to fall and domestic consumption to rise
a. True b. False Indicate whether the statement is true or false