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What does the Theory of Comparative Advantage suggest?
Countries should specialize in the production of goods for which they have a lower opportunity cost.
Countries should produce everything they need independently.
The more a country produces, the cheaper it becomes for everyone.
Trade is only beneficial when two countries have equal production capabilities.
Which economist is credited with the development of the Theory of Comparative Advantage?
John Maynard Keynes
David Ricardo
Adam Smith
Karl Marx
According to the Theory of Comparative Advantage, trade is beneficial when:
Countries are equally efficient in all goods.
One country can produce all goods in greater quantities.
Countries have different relative efficiencies in producing different goods.
All countries can produce goods with the same resources.
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