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How is a country’s economic well-being enhanced through free international trade in goods and services?As per to David Ricardo, with free international trade, it is mutually advantageous for two countries to every specialize in the production of the goods that it can generate relatively most effectively and after that trade those goods. By doing this, the two countries can raise their combined production, which permits both countries to consume more of both goods. This argument stays valid even if a country can generate both goods more effectively than the other country. International trade is not a ‘zero-sum’ game where one country benefits at the expense of other country. In place of, international trade could be an ‘increasing-sum’ game at which all players become winners.
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