The theory of ________ states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.
A) comparative advantage
B) absolute advantage
C) mercantilism
D) bilateral advantage

Question

Quizplus · Accepted Answer

Comparative advantage is the guiding principle behind international trade. The theory of comparative advantage states that a country should produce and sell to other countries those products that it produces most effectively and efficiently. Countries should buy from other countries those products it cannot produce as effectively or efficiently.

The Theory of ________ States That a Nation Should Produce