The Republic of Argonia,owing to its vast resources of arable land and fresh water,is an agrarian nation.It exports agricultural products and in turn imports products that it does not produce such as oil,machinery,computers,and electronic devices.The result is that it spends more on imports than it gains from exports.Which of the following theories prohibits such international trade?

Question

Quizplus · Accepted Answer

The theory of mercantilism advocates for countries to export more than they import in order to accumulate wealth through a favorable balance of trade. This is not a sustainable practice in the long run and can lead to economic imbalances. Argonia's situation of having a trade deficit is not in line with mercantilism theory.

The Republic of Argonia,owing to Its Vast Resources of Arable