Absolute Advantage Theory The theory of absolute advantage destroys the mercantilist idea that international trade is a zero-sum game. Unlike mercantilism this theory measures the nation’s wealth by the living standards of its people and not by gold and silver. There is a strong disadvantage with absolute advantage theory. If there exists a nation that […]
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Mercantalism Definitions It is an age old concept that belongs to the sixteenth century and it is a narrow concept in the way it argued that the prosperity of a nation is estimated based on the possession of gold and silver by a company. They employed the simple logic that if other nations buy more [...] Read More
