The trade theory that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports is called ________.

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The trade theory that encourages exporting to accumulate financial wealth and discourages importing is known as mercantilism. Absolute advantage refers to a country's ability to produce a good or service at a lower cost than another country. Comparative advantage is a theory that suggests that countries should specialize in producing goods where they have the lowest opportunity cost. Factor proportions theory suggests that a country will have a comparative advantage in producing a good that requires inputs that are abundant in that country. None of these theories advocate accumulating wealth through exports and discouraging imports.

The Trade Theory That Nations Should Accumulate Financial Wealth, Usually