Final answer:
Dependency Theory suggests global inequality arises from the exploitation of peripheral nations by core nations, creating a cycle of economic dependence, thereby critiquing free trade and development practices.
Step-by-step explanation:
Dependency Theory is a concept in social studies that examines global inequality through the lens of power relations between nations. Specifically, it posits that economic disparities are primarily due to the exploitation of low-income and middle-income nations (peripheral and semi-peripheral nations) by high-income nations (core nations). This exploitation creates a cycle of dependence where the peripheral nations rely on the core for economic growth, capital, and market access. Core countries, as well as institutions like the World Bank, further exacerbate this dependence by controlling which countries receive financial aid and for what purposes, leading to highly segmented labor markets that favor dominant nations. Dependency theory is a critique of global trade and development practices, challenging the notion that free trade benefits developing nations and suggesting that it perpetuates poverty and dependency on developed nations.