Question

An economy which has trade relation with rest of the world is called an _______.

• A. open economy
• B. closed economy
• C. mixed economy
• D. under developed

Answer 1

Answer: (A)

open economy

An open economy is one that operates a domestic sector and an international (foreign) sector and is interdependent. It is open to international trade. The economy will usually consist of 4 sectors, firms households, government and foreign sector when the economy is open.