The theory of absolute advantage measures a nation's wealth by determining the ________.

Question

Quizplus · Accepted Answer

The theory of absolute advantage, developed by Adam Smith, focuses on a nation's ability to produce a certain good or service more efficiently than other nations. This leads to an increase in the nation's wealth, which is measured by the living standards of its people. Therefore, the correct answer is D, living standards of its people. The other options - A, B, and C - do not accurately measure a nation's wealth according to the theory of absolute advantage.

The Theory of Absolute Advantage Measures a Nation's Wealth by Determining