______ stresses on the 'relative cost difference' rather than 'absolute cost difference' between the goods as the basis for carrying out trade.

CA Foundation · Business Economics · MTP · June 2024
______ stresses on the 'relative cost difference' rather than 'absolute cost difference' between the goods as the basis for carrying out trade.
(A) A. Theory of absolute advantage Hecksher Ohlin Theory
(B) B. Theory of comparative advantage
(C) C. Tobin theory
(D) D. Theory of mercantilism

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Theory of comparative advantage

Topics: Determination of National Income

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