Specialization Increases Economic Interdependence

Steps:

• Identify effects of specialization: it boosts efficiency but creates reliance on others for inputs and markets.
• Evaluate each option: check which effect leads to vulnerabilities like supply disruptions or economic shocks.
• Link to problems: greater interdependence amplifies risks from external factors, such as trade barriers or failures in supply chains.
• Confirm B: it directly causes systemic issues in interconnected economies.

Why B is correct:

• Interdependence, per Adam Smith's division of labor, means firms and workers rely on specialized suppliers, risking widespread disruptions if one link fails, as seen in global supply chain crises.

Why the others are wrong:

• A: Better product quality enhances competitiveness and consumer satisfaction, not problems.
• C: Higher productivity increases output and growth, benefiting the economy.
• D: Improved resource allocation optimizes efficiency, reducing waste without causing issues.

Final answer: B