Magruder's American Government
Magruder’s American Government
1st Edition
Savvas Learning Co
ISBN: 9780133306996
Textbook solutions

All Solutions

Section 12-5: The U.S in a Global Economy

Exercise 1
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The **North American Free Trade Agreement** (1994) discharges trade barriers(they are still regulated) and restrictions from trading and investing between the three states – **Canada, Mexico, and United States**.
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NAFTA boosts trade between the parties. The States economy benefits from increased trade, investments, and a widespread economic output that results in better prices for the consumers, which is important because that increases spending and further boosts the economy. The purpose of NAFTA is to bring more prosperity to its parties.
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**The North American Free Trade Agreement (NAFTA)** is an agreement between the United States, Canada and Mexico that was concluded in 1994. This agreement implies free trade between these states and has generally brought great benefits to each of them, especially for the United States.
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First, there was an increase in trade due to the abolition of import and export taxes and tariffs. Unification States have significantly increased exports to Mexico, especially of agricultural products.
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Further, the citizens of the United States were given the opportunity to buy certain Mexican products at lower prices because the tariffs that apply to imported products from other countries were abolished.
Exercise 2
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The North American Free Trade Agreement (NAFTA) is a free trade agreement between the United States, Canada, and Mexico.
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This agreement implies a free market between these three countries that is, trade without tariffs and quotas, and does not imply a common external trade policy, so it is not basically a protectionist act.
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Protectionism exists in cases where governments try to protect domestic industry by introducing tariffs and quotas on imports or by subsidizing domestic production.
Exercise 3
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The citizens of a country are much more interested in their country’s economy than in its foreign policy. The economy is what crucially affects the quality of life, and for these reasons foreign policy is often used as an instrument to improve a country’s economy.
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The United States is a large market and an economically very powerful country, so they are able to accept and conclude only those agreements at the international level that fully suit them. Less strong economic countries often have to agree to some agreements with which they are not completely satisfied.
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The United States very often shapes its foreign policy in relation to economic goals. As an example, we can mention friendly relations with extremely undemocratic and authoritarian regimes, such as cooperation with Saudi Arabia.
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This country is rich in important natural resources, such as oil and gas, and has developed trade relations with the United States. In this case, the Unification States decided to ignore the crucial difference in values ​​for the sake of economic benefit to its citizens.
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On the other hand, we have the example of Cuba, with which the United States has not cooperated for ideological reasons for decades. According to some analysts, the United States is losing billions of dollars due to this embargo.
Exercise 4
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The Constitution gives Congress the power to, ““to regulate commerce with foreign nations, and among the several states…” in Article I Section 8. Congress also must pass all spending bills which determine government spending and levels of taxation. Article I Section 7 states, “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills. “

The President has a roll in both of these areas however. The President tends to negotiation trade deals and additionally uses data from the Council of Economic Advisors to make recommendations regarding taxation and spending.

Exercise 5
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National security is very important to the United States, especially given the terrorist attacks that have taken place on its territory.
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After these events, there was a significant activity of various national agencies dealing with national security. This led to the need for larger budgets to be provided through the economy. So, one of the roles of the economy is to provide funds to ensure national security.
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A strong economy contributes to strengthening national security primarily because it enables the maintenance of strong military forces and the possession of high-tech equipment.
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Furthermore, a strong economy allows investment in infrastructure that plays a role in national security, such as bridges, canals, roads, railways, etc.
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Economic policy can also pose a threat to national security. Globalization and the creation of free trade agreements for goods and services between states can open the door to potential threats to national security.
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