Study the graph showing the value of trade between the United States and the countries that signed the CAFTA-DR free-trade agreement in 2004.

Question

A graph titled "Trade Figures for CAFTA-DR Nations, 2004–2010" is shown. The total value of exports from the U.S. starts out less than the exports to the U.S. By 2006, it surpasses the exports to the U.S. The exports to the U.S remains relatively the same from 2004 to 2008. Beginning in 2008, exports to the U.S. begins to rise, although it remains lower than the exports from the U.S.

Which statement describes the economic impact of this trade agreement?

(1 point)
Responses

The agreement led exports to the U.S. to increase but led to a decrease in imports.

The agreement led exports to the U.S. to increase but led to a decrease in imports.

The agreement caused imports from the U.S. to increase but led to a decrease in exports.

The agreement caused imports from the U.S. to increase but led to a decrease in exports.

The agreement caused both exports and imports to decrease over time.

The agreement caused both exports and imports to decrease over time.

The agreement caused both exports and imports to increase over time.

Answer 1

Based on the description of the graph, the correct statement that describes the economic impact of the CAFTA-DR free-trade agreement is:

The agreement caused imports from the U.S. to increase but led to a decrease in exports.

This conclusion is supported by the fact that exports from the U.S. surpass the exports to the U.S. by 2006, indicating that while imports from the U.S. may have increased, the trade dynamics favored U.S. exports over CAFTA-DR nations' exports. Additionally, without further details confirming a decrease in exports, this interpretation aligns closely with the observed trends.