Question

A “closed economy’’ is an economy in which ?

(a) The money supply is fully controlled. 

(b) Deficit financing takes place. 

(c) Only exports take place. 

(d) Neither exports nor imports take place.

Answer 1

(d) An economy in which no activity is conducted with outside economies. A closed economy is selfsufficient, meaning that no imports are brought in and no exports are sent out. The goal is to provide consumers with everything that they need from within the economy's borders.