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# Colonial Economic Stability

## Definition

The resilience of colonial economies to external shocks and internal disruptions, including the ability to maintain consistent growth, manage market fluctuations, and adapt to changing conditions. Greater economic freedom typically promotes greater stability through diversified economic activity.

## Source Chapter

Book IV, Chapter 7

## Context

Smith argues that monopoly policies reduce colonial economic stability by creating artificial dependencies and limiting adaptive capacity. He contends that more open economic arrangements would promote greater stability through diversified trade relationships and autonomous policy responses.

## Economic Domain

General Theory

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