The Ricardian model demonstrates that
A)trade between two countries may benefit both if each exports the product in which it has a comparative advantage.
B)trade between two countries will benefit both countries.
C)trade between two countries may benefit one but harm the other.
D)trade between two countries always benefits the country with a larger labor force.
E)trade between two countries may benefit both regardless of which good each exports.

Question

Quizplus · Accepted Answer

The Ricardian model shows that trade can be beneficial for both countries if each specializes in producing and exporting goods in which they have a comparative advantage, leading to more efficient production and consumption.

The Ricardian Model Demonstrates That