International trade theory shows that nations will attain a higher level of living by specializing in goods for which they possess a comparative advantage and importing those for which they have a comparative disadvantage.

Question

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This statement accurately reflects the basic principles of international trade theory, as developed by economists such as David Ricardo and Adam Smith. The idea is that countries can benefit from trade by focusing on producing goods that they are relatively more efficient at producing (i.e. have a comparative advantage) and trading with other countries for goods that they are less efficient at producing (i.e. have a comparative disadvantage). This can allow for greater specialization and efficiency, leading to increased productivity and higher standards of living.

International Trade Theory Shows That Nations Will Attain a Higher