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# Colonial Economic System Equilibrium

## Definition

The stable state toward which colonial economies naturally tend under free market conditions, characterized by balanced production, consumption, and trade relationships. This equilibrium is often disrupted by monopoly policies that create artificial market distortions.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that natural market forces tend toward economic equilibrium, while monopoly policies often prevent this natural balance through artificial restrictions and controlled production. He contends that more open arrangements would allow colonies to achieve natural economic equilibrium.

## Economic Domain

General Theory

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