_______ holds that there are advantages to trade because different countries can produce different goods more efficiently than others.

The theory you're referring to is known as the "Theory of Comparative Advantage". This economic theory was proposed by David Ricardo in the early 19th century. Here's a step-by-step explanation:

1. The theory begins with the observation that different countries have different resources and capabilities. Some countries might be rich in natural resources, while others might have a highly skilled labor force, advanced technology, or efficient infrastructure.

2. Because of these differences, some countries can produce certain goods more efficiently than others. For example, a country with a lot of fertile land might be able to produce agricultural products more efficiently than a country with a lot of factories and machines.

3. The theory then suggests that countries should specialize in producing the goods that they can produce most efficiently. They should then trade these goods with other countries, in exchange for the goods that those countries can produce more efficiently.

4. By doing this, all countries involved in the trade can benefit. They can all end up with more goods than they would have been able to produce on their own, and they can get these goods at a lower cost.

5. This is why the theory is called the "Theory of Comparative Advantage". It's not about who can produce the most of a certain good, but about who can produce it more efficiently, taking into account all the different costs involved.