The theory of ............... was propounded by ..................

Analyze the question: You need to match each international trade theory with the economist who propounded it.

Explain the concept:

• Absolute advantage was propounded by Adam Smith in The Wealth of Nations (1776). A country should specialize in producing goods it can make more efficiently (with fewer resources) than other countries, and trade for the rest.
• Comparative advantage was propounded by David Ricardo (1817, Principles of Political Economy and Taxation). A country should specialize in goods it produces at a lower opportunity cost, even if it has no absolute advantage in anything.
• Mercantilists (16th-18th century) promoted accumulating gold and silver through exports exceeding imports. They did not propound comparative advantage.

Check each option:

• A. Comparative advantage; Mercantilists. Wrong, because Ricardo propounded comparative advantage.
• B. Absolute advantage; Adam Smith. Correct pairing.
• C. Comparative advantage; Adam Smith. Wrong, because Smith is linked with absolute advantage.
• D. Absolute advantage; David Ricardo. Wrong, because Ricardo is linked with comparative advantage.

Tip: Remember the order: Smith → Absolute (the "S" and "A" start the history), and Ricardo → Comparative (Ricardo came later and improved on Smith's idea). Whenever you see one of these pairings swapped, it is a trap.