Question

Why did classical economists consider trade as the
‘engine of growth’? What is the
counter-view projected to this? Discuss.

Answer 1

Classical economists considered trade as the engine of growth because international trade played a key role in enhancing the economic development of a nation. According to them, a company will benefit by producing and exporting those goods that it can produce at a low cost. Similarly, it would be more feasible to import those goods that incurs a lot of expenditure when produced in the home country.