Which of the following features is not a component of the Modern Theory in international trade?

CA Foundation · Business Economics · PYQS · May 2026
Which of the following features is not a component of the Modern Theory in international trade?
(A) A. International trade is only a distinct case of inter-regional trade
(B) B. It is based on labour theory of value
(C) C. It considers factor price differences as the principal cause of commodity price differences
(D) D. It considers the relative prices of the factors which impacts the comparative costs of the good

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. It is based on labour theory of value

Topics: International Trade

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