Question

The ________ states that it can be beneficial for two countries to trade without barriers as long as one is relatively more efficient at producing goods or services needed by the other. - internalization theory - comparative advantage principle - monopolistic advantage theory - absolute advantage principle

Answer 1

Answer:

Comparative Advantage

Explanation:

The assumption of Comparative Advantage theory is that there is no barrier.

It is explained in the model that if each country focuses on what it does best relatively then both countries together can produce more of each good/service using all their labor.

Then they can trade with each other and benefit. (To trade they must produce what the other need)