Classical/Country-based Theories of International Trade

Regarding Mercantilism, what was the primary focus for a nation's economic strength?

• Accumulation of wealth, particularly gold and silver

• Accumulation of technology

• Accumulation of raw materials

• Accumulation of foreign currency

Which theory emphasizes the efficiency of production as the primary determinant of a nation's success in international trade?

• Absolute Advantage theory

• Heckscher-Ohlin Theory

• Mercantilism theory

• Comparative Advantage theory

According to the Absolute Advantage theory, what determines the value of a good?

• Market demand

• Government subsidies

• Labor required for production

• Capital investment

What is the goal of specialization based on Absolute Advantage theory?

• Minimizing imports

• Maximizing national wealth

• Achieving self-sufficiency

• Maximizing domestic production

What does the Comparative Advantage Theory suggest countries should specialize in?

• Goods with lower opportunity costs

• Goods in which they have an absolute advantage

• Goods with high production costs

• Goods with higher demand

According to the Comparative Advantage theory, what factor determines trade patterns between countries?

• Absolute advantage

• Market demand

• Transportation costs

• Opportunity cost