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Question
What do you understand by a closed economy.
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Solution
A closed
economy is one that
has no trading activity with outside economies. The closed
economy is therefore
entirely self-sufficient, which means no imports come into the country and no exports leave
the country. Closed Economy is an economy which has no economic relations
with the rest of the world. This means that there are no imports
from other country and no exports to the other country. Open Economy is an economy which has economic relations
with the rest of the world. An open economy is a type of economy where not
only domestic actors but also entities in other countries engage in trade of
products (goods and services). Trade can take the form of managerial exchange,
technology transfers, and all kinds of goods and services.
A closed economy is one that has no trading activity with outside economies. The closed economy is therefore entirely self-sufficient, which means no imports come into the country and no exports leave the country. Closed Economy is an economy which has no economic relations with the rest of the world. This means that there are no imports from other country and no exports to the other country. Open Economy is an economy which has economic relations with the rest of the world. An open economy is a type of economy where not only domestic actors but also entities in other countries engage in trade of products (goods and services). Trade can take the form of managerial exchange, technology transfers, and all kinds of goods and services.
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