Which of the following is consistent with international trade theory?
A) The United States needs trade restrictions to stay competitive.
B) The United States has been falling behind Europe and Japan because its economy is too open.
C) The standard of living within a country is a function of the economic strength of the economy and not of its relative position.
D) A country should strive for comparative advantage in manufacturing.

Question

Quizplus · Accepted Answer

International trade theory suggests that a country's standard of living is determined by its economic strength and efficiency, rather than its relative position compared to other countries. Comparative advantage, rather than a specific focus on manufacturing, is key to trade theory.

Which of the Following Is Consistent with International Trade Theory