The Theory of ________ States That a Nation Should Produce

question 305

Multiple Choice

The theory of ________ states that a nation should produce and sell goods to other countries that it produces most efficiently, and buy goods from other nations that they produce more efficiently.

• A) comparative advantage
• B) absolute advantage
• C) mercantilism
• D) bilateral advantage

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Definitions:

British Pound

The official currency of the United Kingdom, symbolized as GBP, it is one of the world's major currencies.

Exchange Rate

The value of one nation's currency versus the currency of another nation or economic zone.

U.S. Importer

A U.S. importer is a company or individual that brings goods or services into the United States from foreign countries for sale or use.

U.S. Dollar

The official currency of the United States, which is also used as a standard monetary unit for international transactions.