What Is the Difference Between an Open Economy and a Closed

question 35

Multiple Choice

What is the difference between an open economy and a closed economy?

• A) A closed economy has sealed borders and allows no tourism or migration.
• B) An open economy has very few restrictions on trade or financial flows.
• C) A closed economy has very tough wage and hour laws and will not tolerate labor unions.
• D) An open economy has lax restrictions on drugs or other illegal activities.

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Definitions:

Supply Schedule

A table or graph showing the quantity of a product that producers are willing to supply at different prices over a specified period.

Supply Curve

An illustrated depiction that maps out the connection between a product's price and the volume of the product that providers are ready to sell.

Supply

The total amount of a product or service that is available for consumers.

Demand

The quantity of a product or service that consumers are willing and able to buy at various prices during a certain period.