The U. S. committed itself to creating a free trade zone between the U.S., Canada and Mexico. Why might this be important? Relative to imports and exports to other nations, what is the size of these two North American trading partners trade relationship with the U.S.?
The U.S. engages in more trade with Canada and Mexico than with other countries. Over 30% of the exports are made to these countries and just under 30% imports. A reduction of barriers will make trade easier to carry out and more economically efficient.
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What reason do economists believe that megabanks are forming?
A) Megabanks enable economies of scale in information processing which allows them to better serve their customers. B) Megabanks create economies of scale which allow the banks to make riskier investment and increase profits. C) Megabanks can compensate for their economies of scale by diversifying into many countries. D) Megabanks allow investors more opportunities and have continued to grow by using their economies of scale to overwhelm their competition.
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower