The primary explanation of trade among nations is Ricardo's theory of:
A) offshoring.
B) resource abundance.
C) absolute advantage.
D) comparative advantage.

Question

Quizplus · Accepted Answer

Ricardo's theory of comparative advantage explains that each country should specialize in producing the goods they can produce most efficiently, and then trade with other countries for goods they cannot produce as efficiently. This leads to greater overall efficiency and benefits for all trading countries.

The Primary Explanation of Trade Among Nations Is Ricardo's Theory