Question

Compare the Classical Theory of international trade with the Modern Theory of International trade.

Answer 1

Classical Theory of International Trade	Modern Theory of Internationa] Trade
This theory explains the phenomenon of international trade on the basis of labour theory of value.	This theory explains the phenomenon of international trade on the basis of the general theory of value.
It Presents a one-factor model.	It presents a multi-factor model.
It attributes the difference in the comparative costs to differences in the productive efficiency of workers in the two countries.	It attributes the differences in comparative costs to the differences in factor endowment in the two countries.