Adam Smith recognized the beneﬁts from trade based on ____, and David Ricardo recognized the beneﬁts from trade based on ____.

Question

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Adam Smith introduced the concept of absolute advantage, which explains that countries benefit from trade by exporting goods they can produce more efficiently than other countries. David Ricardo introduced the concept of comparative advantage, which suggests that countries benefit from trade even if they do not have an absolute advantage, by specializing in the production of goods for which they have a lower opportunity cost.

Adam Smith Recognized the Beneﬁts from Trade Based on ____