Trade, Exchange and Interdependence
A relationship between two or more people, regions, nations or other entities in which each is dependent on the other for necessary #goods or #services. Economic interdependence often occurs when all parties are specialized in the fulfillment of some requirements, and must trade with others for unmet requirements.
People specialize when they produce only some of the goods and services they consume, then trade with others to get more of the things they want. Specialization increases the amount of goods and services that people produce and consume.
Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a newsdealer for fifty cents, the newsdealer and I exchange two commodities: I give up fifty cents, and the newsdealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager.
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Research Journal of Economics