NAFTA and the Auto Industry

How much would a 1993 Chevy Suburban cost today if its original price were adjusted for inflation?

• $21,370

• $47,188

• $42,344

• $25,000

What was the approximate percentage increase in the average price of new cars since the early 1990s, compared to the increase in price for almost all other goods (excluding food and energy)?

• New cars: 86%, Other goods: 7%

• New cars: 7%, Other goods: 86%

• New cars: 7%, Other goods: 7%

• New cars: 86%, Other goods: 86%

What was the primary goal of the North American Free Trade Agreement (NAFTA) when it took effect in 1994?

• To establish a common currency among member nations.

• To eliminate tariffs on most imported and exported goods between the US, Canada, and Mexico.

• To create a unified political union in North America.

• To restrict immigration between member countries.

What was one of the anticipated benefits of NAFTA for Mexico, according to the countries involved?

• Increased tourism from the US and Canada.

• A decrease in the cost of living for Mexican citizens.

• Strengthening Mexico's economy to slow illegal immigration.

• Expansion of Mexico's agricultural sector.

How did NAFTA primarily benefit the auto industry?

• By increasing demand for luxury vehicles.

• By allowing automakers to keep costs down through tariff-free trade of cars and auto parts.

• By standardizing car designs across North America.

• By promoting the use of electric vehicles.

What percentage of a car's parts needed to be sourced from North America for it to be tariff-free under NAFTA?

• 50%

• 62.5%

• 75%

• 80%

What was the approximate cost difference between a car made in Mexico and one built in the USA, and what was the primary reason for this difference?

• Mexico: $1,200 more, due to higher quality parts.

• Mexico: $1,200 less, due to cheaper labor and parts.

• Mexico: $2,000 more, due to import taxes.

• Mexico: $2,000 less, due to advanced manufacturing techniques.

For a 2014 Ford Mustang, where were its manual transmission and doors most likely sourced from, respectively?

• Manual transmission: USA, Doors: Mexico

• Manual transmission: Mexico, Doors: Canada

• Manual transmission: Germany, Doors: USA

• Manual transmission: Canada, Doors: South Korea

Approximately what percentage of cars sold in the US met the standards to avoid tariffs under NAFTA?

• 14%

• 25%

• 75%

• 86%

What is a significant change introduced by the USMCA regarding the auto industry's North American sourced parts requirement, compared to NAFTA?

• It reduced the requirement to 50% North American sourced parts.

• It increased the requirement to 75% North American sourced parts and added a minimum wage component for workers.

• It eliminated all sourcing requirements for auto parts.

• It only changed the tariff rate, not the sourcing percentage.