Unlike Adam Smith, David Ricardo's trading principle emphasizes the
A) demand side of the market.
B) supply side of the market.
C) role of comparative costs.
D) role of absolute costs.

Question

Quizplus · Accepted Answer

David Ricardo's trading principle emphasizes the role of comparative costs, which states that countries should specialize in producing goods in which they have a comparative advantage (i.e. a lower opportunity cost) and trade with other countries for goods they do not produce efficiently. This principle is based on the idea that trade benefits both parties and leads to overall economic growth.

Unlike Adam Smith, David Ricardo's Trading Principle Emphasizes the