The _____ theory viewed international trade as a zero-sum game.
A) comparative advantage
B) mercantilism
C) strategic trade
D) national competitive advantage of industries

Question

The _____ theory viewed international trade as a zero-sum game.
A) comparative advantage 
B) mercantilism 
C) strategic trade 
D) national competitive advantage of industries

Quizplus · Accepted Answer

Mercantilism theory viewed international trade as a zero-sum game where one country's gain in trade would be another country's loss, and it focused on accumulating wealth through exports while limiting imports. This theory was prominent in the 16th and 17th centuries. Option A, C, and D are modern economic theories that do not view international trade as a zero-sum game. Comparative advantage theory suggests that countries should specialize in producing goods that they can produce at a lower opportunity cost than other countries and then trade those goods. Strategic trade theory suggests that governments can intervene in international trade to create a comparative advantage for their domestic firms. National competitive advantage of industries theory suggests that the competitive advantage of a country's industries depends on the unique combination of factors, including natural resources, technology, and skilled labor.

The _____ Theory Viewed International Trade as a Zero-Sum Game