activity. As a result, political decisions on matters of economic policy that could have wide international ramifications are now made in a variety of geographic locations. And there has been a great increase and diversification in the interests pursued through multilateral co-operation. Second, economies have become far more interdependent. Indeed, the "international" economy has to a significant extent become a global economy. -7- 37. It was the very success of the world economy in the 1950s and 1960s that brought those major changes in its makeup. Revolutionary changes in transport and communications systems, liberalized trading arrangements and the relaxation of foreign exchange controls in the industrialized market economies generated growth in the international exchange of goods, services and capital that far outstripped growth in production. As a result, not only are there increased macro-economic linkages among economies, but extensive microlinks have also been established. In the area of production, there is world-wide sourcing and marketing by transnational firms and greatly increased intra-industry trade, intra-firm trade and trade in intermediate products. Such increased interdependence or, as some would have it, "interrelatedness" has obviously been associated with important benefits to individual nations. But it has also left national economies more vulnerable to exogenous influences originating in other parts of the world economy. In particular, domestic incomes and employment have become more vulnerable to other countries' trading and industrial policies. International capital flows have limited national Governments' control over domestic monetary affairs and exchange rates. In some instances, international labour flows have generated new domestic tensions. 38. The issues of trade, money, and finance have also become more interrelated. The restoration of international financial stability depends, in large part, on debtor countries' success in expanding exports and this requires that the industrial countries keep their markets open. Conversely, a robust trading system 
**Analysis**
The text discusses the changes in the global economy, the increasing interdependence of economies, and the implications of these changes on national economies and governments. It highlights the importance of international cooperation and the challenges that come with global economic linkages. The text does not focus on specific sectors such as agriculture or industry, but rather on the broader economic landscape.

**Category**
International trade, Economy