This theory follows that maximum gain on a worldwide basis will be realized if there are no impediments to trade,if there is free competition in pricing,and if capital flows are unrestricted.
A) The marginalist theory
B) The law of comparative advantage
C) "Buy American" laws
D) The Doctrine of Protectionism

Question

Quizplus · Accepted Answer

The theory described in the statement is the law of comparative advantage, which asserts that unrestricted free trade leads to the maximum gains for all nations involved. This theory suggests that nations should focus on producing goods and services for which they have a comparative advantage and trade with other nations for goods and services they cannot produce as efficiently. "Buy American" laws and the Doctrine of Protectionism place restrictions on trade and are not consistent with this theory. The marginalist theory is related to the study of individual decision making and is not directly relevant to the concept of trade.

This Theory Follows That Maximum Gain on a Worldwide Basis