Final answer:
Exchange or trade resulting from specialization occurs through markets, increasing productivity and the standard of living. Risks include interdependence and potential disputes, but the overall economic benefit is generally positive.
Step-by-step explanation:
Exchange or trade resulting from specialization can and sometimes does occur through markets. Specialization allows individuals and firms to focus on the production of certain goods or services. The wages earned from specializing can then be used to purchase a variety of other goods and services they require. Through this process, productivity and competitiveness within markets increase, which generally results in a higher standard of living for those engaged in such specialized trade.
However, such dependence on trade does lead to interdependence between nations, which can sometimes result in disputes and trade barriers affecting the standard of living. In the absence of trade, countries may experience higher opportunity costs and decreased production. Therefore, while specializing and trading may come with risks, the overall benefit to economies tends to be positive.