Unlike the mercantilists,Adam Smith maintained that:
A) Trade benefits one nation only at the expense of another nation
B) Government control of trade leads to maximum economic welfare
C) All nations can gain from free international trade
D) The world's output of goods must remain constant over time

Question

Quizplus · Accepted Answer

Adam Smith argued that free international trade benefits all nations by allowing them to specialize in the production of goods which they have comparative advantage in, and then trade these goods with other nations. This leads to increased productivity, efficiency, and ultimately benefits consumers in all nations. Smith believed that government intervention in trade is likely to lead to inefficiencies and distortions in the market.

Unlike the Mercantilists,Adam Smith Maintained That