Which theory by Ricardo challenged the mercantilism concept?
Ricardian theory of international trade
Ricardian theory of national savings
Ricardian theory of value
Ricardian theory of wealth
Answer
The Ricardian theory of international trade, advanced by David Ricardo, overturned the traditional mercantilist belief that a nation's wealth depends solely on its accumulation of gold and silver. Ricardo asserted that specialization and free trade, based on comparative advantage, enhance a nation's overall economic prosperity by efficiently allocating resources and maximizing gains from production and trade.
The Ricardo Revolution: Mastering David Ricardo's Economic Legacy
Subscribe Now!
Learn something
new everyday
Playing quizzes is free! We send 1 quiz every week to your inbox