Give brief explanation of Comparative Advantage Theory in International Trade

May 8th, 2013 Comments off
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In international trade, we often heard of the Comparative Advantage Theory which is:-

COMPARATIVE ADVANTAGE THEORY :

  • Is advocated by David Ricardo suggesting that countries should specialize in the goods they can produce most efficiently rather than trying for self-sufficiency.
  • Views trade as a positive-sum game in which all countries that participate in trading could realize economic gains by reaping benefits from specializing in what it is best at producing, and trading with other nations

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