Trade dependence
Definition. Trade dependence is the extent to which an economy relies on international trade, often measured by the ratio of total trade, exports plus imports, to gross domestic product. A high ratio indicates that the economy is deeply integrated with the rest of the world.
Singapore has a very high degree of trade dependence as a small open economy with a limited domestic market. This exposes it to external shocks such as global recessions and imported inflation, making external stability a key policy concern.
This term belongs to The Singapore Economy in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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