Absolute advantage is the key to mutually beneficial gains from trade.

Name: Absolute advantage is the key to mutually beneficial gains from trade.
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Question

Quizplus · Accepted Answer

Relative advantage is the key to mutually beneficial gains from trade, not absolute advantage. Relative advantage refers to the ability to produce a good or service at a lower opportunity cost. When countries trade with each other based on their relative advantages, they can both benefit and increase their overall output and consumption.

Absolute Advantage Is the Key to Mutually Beneficial Gains from Trade