Statement I: Adam Smith believed that people should never buy anything if they can make it themselves.
Statement II: The basis for international trade is that if a nation can import a particular good or service at a lower cost than if it were produced domestically,it should trade for that good.
A)Statement I is true and statement II is false.
B)Statement II is true and statement I is false.
C)Both statements are true.
D)Both statements are false.

Question

Quizplus · Accepted Answer

Adam Smith actually believed in the division of labor and specialization. He argued that individuals and nations should focus on producing what they are most efficient at and then trade with others to get the other goods they need. Therefore, statement I is false. Statement II is true and reflects the principle of comparative advantage, which is a key concept in international trade theory.

Statement I: Adam Smith Believed That People Should Never Buy