MTTC 103 Elementary Practice

The primary factor causing global economic interdependence is the international reduction of trade barriers. When countries lower or eliminate tariffs, quotas, and other restrictions on trade, it allows for a smoother flow of goods, services, and capital across borders. This fosters a more interconnected global economy, as nations become reliant on one another for resources, products, and markets. As trade barriers diminish, businesses can expand beyond national borders, access a wider variety of goods, and benefit from economies of scale, ultimately leading to increased economic collaboration and interdependence.

In a world where trade is less restricted, economies can specialize in specific industries where they hold a comparative advantage, leading to more efficient production and distribution processes. This interconnectedness also means that economic events in one country can have ripple effects in others, emphasizing the level of dependency among nations. Therefore, the reduction of trade barriers stands out as a crucial driver of global economic interdependence.