Companies from the nation of Moldavia are more efficient in the production of certain types of apparel, while companies from the United States are more efficient in the production of certain types of computers. Which economic theory predicts that capital would move to Moldavia to be invested there in the apparel industry and to the United States to be invested in its computer companies?
A)rapid specialization theory
B)investor collectivism theory
C)free-trade doctrine
D)investor individualism doctrine

Question

Quizplus · Accepted Answer

The free-trade doctrine suggests that resources, including capital, will move to where they are most efficiently used, promoting investment in industries where countries have a comparative advantage.

Companies from the Nation of Moldavia Are More Efficient in the Production