26 Jul DISTINGUISH BETWEEN A CUSTOMS UNION AND A COMMON MARKET.
A quarter century ago Canada Mexico and t Show more need help with these macro economics questions please. A quarter century ago Canada Mexico and the United States formed a customs union known as NAFTA. This is not a common market and indeed there are an estimated 7 to 10 million illegal immigrants living in the United States many of whom are Mexicans. Furthermore illegal drugs are the most successful Mexican multinational enterprise employing some 450000 Mexicans and generating about $20 billion in sales second only behind the countrys oil industry and automotive industry exports. (Source: David Luhnow Saving Mexico WSJ December 26 2009.) A) Distinguish between a customs union and a common market. B)Explain why there has been a growth in the underground economy of the United States. C)Evaluate the following non-exclusive means of diminishing the underground economy: 1.Transform NAFTA into a common market. 2.Legalize drugs. 3.Increase both the surveillance by the IRS of the 30 million businesses in the United States and reform the tax system by introducing for example a value added tax. 4.Increase the effectiveness of surveillance of social security recipients from gaining income from the underground economy. Show less
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