Question

according to adam smith, why were mercantilist policies that limited trade unwise?
a. because countries could be most productive by focusing on making certain goods and importing other items
b. because consumers would be unhappy if they couldnt purchase imported items
c. because trading with other countries was the best way to build gold and silver reserves
d. because buying other countries goods was the best way to help the people in those countries

Explanation:

Adam Smith's theory of absolute advantage posits that countries should specialize in producing goods they can make most efficiently (focus on certain goods) and trade (import) for others. This leads to overall productivity gains. Option B is about consumer preference which isn't Smith's main argument. Option C is a mercantilist view (Smith opposed it as he didn't focus on gold - silver reserves in the same way). Option D is too altruistic and not in line with Smith's economic efficiency - based argument.

Answer:

A. Because countries could be most productive by focusing on making certain goods and importing other items