David Ricardo's theory in favor of free trade uses the ideal of ?
Correct answer: D. comparative advantage
- A. absolute advantage
- B. mutual advantage
- C. multilateral advantage
- D. comparative advantage
Explanation
Ricardo’s argument for free trade is based on comparative advantage: countries benefit by specializing according to relative opportunity costs, even when one country is more productive in every good. Absolute advantage is therefore not the central Ricardo principle.
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