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# Colonial Economic Interdependence

## Definition

The mutual economic relationships between colonies and other regions, including trade dependencies, capital flows, and labor mobility. Greater interdependence through open trade relationships typically promotes economic efficiency and development.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that colonial economic interdependence with global markets is essential for optimal development. He contends that monopoly policies that restrict these relationships artificially limit colonial prosperity and economic potential.

## Economic Domain

Exchange

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