Macroeconomics

Problem 2: (15 Points) Before 1995, trade between Canada and Mexico was subject to tariffs. In 1995, Mexico joined NAFTA and all Canadian and Mexican tariffs have gradually been removed. a. Explain how the price that Canadian consumers pay for goods from Mexico and the quantity of Canadian imports from Mexico have changed. Who are the winners and who are the losers from this free trade? b. Explain how the quantity of Canadian exports to Mexico and Canadian government's tariff revenue from trade with Mexico has changed