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Questions and Answers
Who heralded the formulation of a theory of free trade?
Who heralded the formulation of a theory of free trade?
What type of theories does the country-based international trade theory refer to?
What type of theories does the country-based international trade theory refer to?
What is the purpose of the division of labor in a work process?
What is the purpose of the division of labor in a work process?
What does a trade surplus indicate for a country?
What does a trade surplus indicate for a country?
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Which economic concept restricts imports and reduces consumer choices?
Which economic concept restricts imports and reduces consumer choices?
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According to the information provided, what was the second phase of capitalism characterized by?
According to the information provided, what was the second phase of capitalism characterized by?
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The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between ______.
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between ______.
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Country-based international trade theory states that a country's wealth is determined by its holdings of ______ and silver.
Country-based international trade theory states that a country's wealth is determined by its holdings of ______ and silver.
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Classical refers to the ______-based theories.
Classical refers to the ______-based theories.
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Modern refers to the ______-based theories.
Modern refers to the ______-based theories.
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Adam Smith published Wealth of Nation in ______.
Adam Smith published Wealth of Nation in ______.
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David Ricardo published Principles of Economics in ______.
David Ricardo published Principles of Economics in ______.
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David Hume offered the theory of the ______-specie flow mechanism.
David Hume offered the theory of the ______-specie flow mechanism.
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Division of labor is the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons to boost productivity and efficiency and enhance ______.
Division of labor is the separation of a work process into a number of tasks, with each task performed by a separate person or group of persons to boost productivity and efficiency and enhance ______.
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Trade surplus is the amount by which the value of a country's exports exceeds the cost of its ______.
Trade surplus is the amount by which the value of a country's exports exceeds the cost of its ______.
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Industrial capitalism was the second phase of capitalism in which industries/ factories became the dominant factor in the production of ______.
Industrial capitalism was the second phase of capitalism in which industries/ factories became the dominant factor in the production of ______.
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Individuals benefit from a greater choice of affordable goods in a ______ trade system.
Individuals benefit from a greater choice of affordable goods in a ______ trade system.
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__________ refers to the firm-based theories.
__________ refers to the firm-based theories.
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It restricts imports and reduces the choices available to consumers - __________.
It restricts imports and reduces the choices available to consumers - __________.
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__________ was the second phase of capitalism in which industries/ factories became the dominant factor in the production of goods.
__________ was the second phase of capitalism in which industries/ factories became the dominant factor in the production of goods.
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Country-based international trade theory states that a country's wealth is determined by its holdings of ______ and silver.
Country-based international trade theory states that a country's wealth is determined by its holdings of ______ and silver.
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David Ricardo published Principles of Economics in ______.
David Ricardo published Principles of Economics in ______.
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Adam Smith published Wealth of Nation in ______.
Adam Smith published Wealth of Nation in ______.
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David Hume offered the theory of the ______-specie flow mechanism.
David Hume offered the theory of the ______-specie flow mechanism.
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__________ advantage is the country's inherent ability to produce specific goods efficiently and effectively at a relatively lower marginal cost.
__________ advantage is the country's inherent ability to produce specific goods efficiently and effectively at a relatively lower marginal cost.
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The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between ______.
The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between ______.
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Study Notes
Economic Theories and Trade
- Adam Smith is known for formulating the theory of free trade.
- Country-based international trade theory refers to classical theories that measure wealth based on resource holdings, especially gold and silver.
- Modern trade theories focus on firm-based and competitive advantages in economic interactions.
Division of Labor
- The division of labor separates a work process into distinct tasks, enhancing productivity and efficiency.
- It allows each task to be performed by specialized individuals or groups, improving overall workflow.
Trade Indicators
- A trade surplus occurs when the value of a country's exports exceeds its imports, indicating economic strength.
- A trade deficit implies reliance on foreign goods, potentially impacting currency value and economic stability.
Trade Policies
- Protectionism restricts imports and limits consumer choices by imposing tariffs and quotas on foreign goods.
- This often leads to higher prices and reduced availability of products.
Phases of Capitalism
- Industrial capitalism marks the second phase of capitalism, characterized by the emergence of factories as the main production unit.
- This phase emphasizes mass production and the growth of industries over traditional artisanal practices.
Contributions of Key Economists
- Adam Smith published "Wealth of Nations" in 1776, laying foundational principles of economics and free markets.
- David Ricardo published "Principles of Economics" in 1817, further developing trade theories and comparative advantage.
- David Hume proposed the price-specie flow mechanism, illustrating the balance of trade effects on currency and prices.
Benefits of Trade Systems
- A free trade system allows individuals access to a wider range of affordable goods, enhancing consumer choice and economic growth.
- Comparative advantage gives countries the ability to specialize in producing specific goods more efficiently, fostering international trade cooperation.
WTO
- The World Trade Organization (WTO) is the sole global entity managing international trade rules among member countries, facilitating negotiations and dispute resolutions.
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Description
Test your knowledge on international trade theories and prominent economists such as Adam Smith and David Ricardo. Learn about concepts like country-based and firm-based theories in international trade. Explore the contributions of Smith and Ricardo to the field of economics.
