Studies of NAFTA have concluded that increases in the variety of U.S. imports from Mexico are equivalent to about a ________ per year reduction in Mexican import prices.
A) 100.2%
B) 10.2%
C) 1.2%
D) 0.2%

Question

Quizplus · Accepted Answer

Studies of NAFTA have shown that the increase in the variety of U.S. imports from Mexico, due to the reduction in trade barriers, effectively acts like a 1.2% per year reduction in Mexican import prices. This is because consumers get access to a wider range of products at lower prices, which is economically similar to reducing the prices of imports.

Studies of NAFTA Have Concluded That Increases in the Variety