The Major Difference Between a Closed Economy and an Open

question 150

Multiple Choice

The major difference between a closed economy and an open economy is that a(n)

• A)closed economy balances budget, while an open economy does not.
• B)open economy is a market economy, while a closed economy relies on planning.
• C)open economy interacts with the rest of the world, while a closed economy does not.
• D)closed economy keeps political affairs secret, while an open economy does not.

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Definitions:

Market Supply Curve

A graphical representation that shows the quantity of goods that producers are willing and able to sell at various prices over a given period.

Marginal Opportunity Cost

By deciding on one route, one foregoes the possible advantages that other routes could have offered.

Long-run Equilibrium

The state in which, over time, supply and demand are balanced, and all adjustments to economic conditions have been made, resulting in stable prices and outputs.