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# Colonial Economic System Feedback Loops

## Definition

The information flows and response mechanisms through which colonial economies adjust to performance outcomes, including market prices, profit signals, and consumer demands. Better feedback loops through market mechanisms promote more effective economic adjustment.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that market mechanisms provide superior feedback compared to monopoly control, allowing economic actors to respond effectively to changing conditions. He contends that these feedback loops promote more efficient resource allocation and economic adjustment.

## Economic Domain

Exchange

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