Discussion
A closed economy is an economy in which
Answer: D
A closed economy is one in which neither exports nor imports take place.
A closed economy has no economic dealings with the rest of the world: it does not trade goods or services across its borders, and in the strict model there are no international capital flows either. Everything produced is consumed or invested at home. An open economy, by contrast, exports and imports.
An economy with only exports is still open to trade. Control of the money supply and deficit financing are features of monetary and fiscal policy, which both open and closed economies can have.
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