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North america free trade agreement

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Reference no: EM131748475

As a result of the North America Free Trade Agreement (NAFTA), the United States and Canada have shifted to free trade with Mexico. It is assumed that Mexico has an abundance of unskilled labor while the United States and Canada have an abundance of skilled labor. According to the Stolper-Samuelson theorem, how this shift will affect the real wage of unskilled labor in Mexico and the real wage of unskilled labor in the United States and Canada?

Reference no: EM131748475

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