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# Natural Advantages in Trade

## Definition

The inherent economic benefits that certain countries possess in producing specific goods, whether due to climate, geography, natural resources, or acquired skills. These advantages should guide trade patterns rather than artificial restrictions.

## Source Chapter

Book IV, Chapter 2

## Context

Smith argues that countries should specialize in producing goods where they have natural advantages and trade for other goods, rather than attempting to produce everything domestically. He uses the example of Scottish wine production to illustrate the absurdity of ignoring natural advantages.

## Economic Domain

Exchange

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