The mercantilism said to collect gold, and gold is the wealth of nation. However, David Ricardo explained that the welfare of both countries will be higher if the exports and imports are based on comparative advantage. So in layman terms, a country exports goods to be able to import goods from other country.
Because that country has a certain resource which is abundant to them however rare to other countries. That can produce a large profit. For example during the colonial times America was the main exporter of cotton and tobacco due to the fact other countries did not farm those as much.
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The mercantilism said to collect gold, and gold is the wealth of nation. However, David Ricardo explained that the welfare of both countries will be higher if the exports and imports are based on comparative advantage. So in layman terms, a country exports goods to be able to import goods from other country.
Because that country has a certain resource which is abundant to them however rare to other countries. That can produce a large profit. For example during the colonial times America was the main exporter of cotton and tobacco due to the fact other countries did not farm those as much.