1.

Differentiate between open economy and closed economy.

Answer»

Following are the differences between open economy and closed econmy :

Open Economy:

  1. Open economy has trade relations with the remaining world.
  2. Development opportunities are more in an open economy.
  3. There can be a difference between domestic income and national income in this economy.

Closed Economy:

  1. Closed economy does not have any trade relation with the remaining world.
  2. Development opportunities are less in a closed economy.
  3. Domestic income and national income are same in this economy.


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