Which of the following is true about the theory of absolute advantage?
A) The theory accepts the mercantilist idea that international trade is a zero-sum game.
B) The theory approves the objective of national governments to acquire wealth through restrictive trade policies.
C) The theory emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates.
D) The theory measures a nation's wealth by how much gold and silver it has on reserve.

Question

Quizplus · Accepted Answer

The theory of absolute advantage, developed by Adam Smith, emphasizes that nations should open their doors to trade so that people can obtain more goods at cheaper rates. This theory rejects the mercantilist idea that international trade is a zero-sum game and does not approve of the objective of national governments to acquire wealth through restrictive trade policies. The theory does not measure a nation's wealth by how much gold and silver it has on reserve.

Which of the Following Is True About the Theory of Absolute