Which of the Following Correctly Describes a Closed Economy

question 89

Multiple Choice

Which of the following correctly describes a closed economy?

• A) In a closed economy, consumption by households is equal to zero.
• B) A closed economy is one where there is no government sector.
• C) In a closed economy, investment by domestic firms is equal to zero.
• D) A closed economy is one that depends entirely on domestic consumption and investment.

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Definitions:

Tacit Collusion

An agreement among competitors to act in a manner that increases profits without explicitly communicating or formalizing their actions as a pact.

Differentiated Products

Products that are similar but distinguished from each other by features, branding, quality, or other attributes.

Tacit Collusion

An unspoken arrangement between firms in a market to set prices or production levels that benefit them at the expense of market competition.

Marginal Costs

The augmented cost incurred by the production of an extra unit of a product or service.