The theory of absolute advantage suggests that under free, unregulated trade, each nation should specialize in producing those goods it can produce most efficiently.

Question

Quizplus · Accepted Answer

The theory of absolute advantage, proposed by Adam Smith, argues that each nation should specialize in producing goods it can produce most efficiently, leading to increased productivity and lower costs. This will result in greater overall economic welfare for all nations involved in the trade.

The Theory of Absolute Advantage Suggests That Under Free, Unregulated