chap 5 Flashcards
(5 cards)
1
Q
what is the main goal of mercantilism?
A
to achieve a trade surplus
2
Q
who developed the theory of absolute advantage?
A
adam smith
3
Q
comparative advantage suggests that countries should specialize in?
A
goods they produce relatively more efficiently, even if less efficient overall
4
Q
Which key concept is the hecksher-ohlin theory based on?
A
differences in factor endowments
5
Q
what does the product life cycle theory explain about trade patterns?
A
trade is influenced by the economic stages of a product
