Adam Smith in his renowned treatise, THE WEALTH OF NATIONS, provided not only a rationale for a market economy based upon competition, but also advanced a rationale for trade among nations called the _____.
A) Theory of Comparative Advantage
B) Theory of Absolute Advantage
C) Theory of Temporary Advantage
D) Theory of Competitive Advantage

Question

Quizplus · Accepted Answer

Adam Smith is known for the Theory of Absolute Advantage, which suggests that nations should specialize in producing goods where they have an absolute efficiency advantage.

Adam Smith in His Renowned Treatise, THE WEALTH OF NATIONS