The comparative advantage theory states that all nations should strive to become self-sufficient in order to enjoy the highest standard of living.

Question

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The comparative advantage theory actually suggests that nations should specialize in producing goods and services in which they have a lower opportunity cost, and then trade with other nations for goods and services produced in which they have a higher opportunity cost. This results in more efficient production and higher overall prosperity for all nations involved.

The Comparative Advantage Theory States That All Nations Should Strive