Which of the following theories identifies specialization as a reason for international business?
A) theory of comparative advantage
B) imperfect markets theory
C) product cycle theory
D) None of these are correct.

Question

Quizplus · Accepted Answer

The theory of comparative advantage argues that countries specialize in producing goods and services in which they have a comparative advantage, which can be the result of natural resources, technology, or other factors. This specialization leads to international trade as countries seek to exchange their goods and services with others that are not as efficient in producing them.

Which of the Following Theories Identifies Specialization as a Reason