David Ricardos most significant theory was comparative advantage, arguing that a nation will gain through trade by producing what is most efficient and exchanging with other nations.
A country has a comparative advantage if it can produce a certain good or service for less money than its trading partners. The idea of comparative advantage explains why companies, countries, or individuals can profit from trade.
When speaking of international trade, comparative advantage refers to the products that a country can produce more quickly or more affordably than other countries.
Even while this frequently demonstrates the benefits of trade, several contemporary economists now acknowledge that focusing only on comparative advantages might result in resource exploitation and depletion in a country.
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