David Ricardo believed that:
A) trade is a zero-sum game; that is, a country benefits at the expense of other countries.
B) trade will benefit countries when it generates gold and silver for the national treasury.
C) all nations can gain from free international trade.
D) trade cannot increase the world's output of goods.

Question

Quizplus · Accepted Answer

David Ricardo is famous for his theory of comparative advantage, which argues that all countries can benefit from free international trade by specializing in producing the goods they are most efficient at producing and trading for other goods they are less efficient at producing. This means that trade is not a zero-sum game where one country's gains come at the expense of another country's losses. Ricardo also did not believe that trade was solely about generating gold and silver for a country's treasury, and he recognized that trade could increase the world's output of goods by allowing for specialization and efficiency gains.

David Ricardo Believed That