David Ricardo Discovered That Two Countries Can Still Gain by Trading

question 201

Multiple Choice

David Ricardo discovered that two countries can still gain by trading even if one country is more efficient in the production of every commodity.Ricardo's discovery is called the law of

• A)comparative advantage.
• B)absolute advantage.
• C)compensating balances.
• D)increasing returns.

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Definitions:

Industrial Capitalist

An individual or entity that invests in industries for profit through the ownership of physical goods and capital goods used in production.

19th Century

The period from January 1, 1801, to December 31, 1900, characterized by industrialization, colonial expansion, significant technological advancements, and various social changes.

19th Century

A period from January 1, 1801, to December 31, 1900, that was marked by significant industrial, cultural, and political change worldwide.

Cash Crops

Crops grown for direct sale in the market, as opposed to being grown for the farmer's use or for livestock feed.