According to the Smith, Ricardo, and Heckscher-Ohlin theories, a country's economy may gain if its citizens buy some products from other nations that could be produced in their home nation. What is the reasoning behind this idea?
A) The natural resources of a country limit the types and quantities of items that can be produced.
B) International trade is typically regulated by government forces that prevent a business from exporting.
C) International trade allows a country to specialize in items that can be produced most efficiently in that country.
D) First-mover advantages limit a country from producing every product that citizens need or want.
E) Innovative products are typically produced in the home country, but high-demand products should be imported.

Question

Quizplus · Accepted Answer

International trade allows countries to specialize in the production of goods where they have a comparative advantage, leading to more efficient production and potential gains from trade.

According to the Smith, Ricardo, and Heckscher-Ohlin Theories, a Country's