Question
Show the difference between closed economy and open economy.

Answer

Closed Economy Open Economy
Closed economy means economy without the role of the foreign trade and government. Saving, investment, government and foreign trade play their roles in open economy
Closed economy have two parties
$A.$ business firms $B.$ families
In open economy, there are four parties : $A.$ business firms $B.$ families $C.$ government $D$. money market and foreign trade.
This concept is far from reality. This concept is a reality.
It is a dependent economy. It is a independent economy.
Economic transactions with other countries are not seen. Economic transaction with other courtiers are seen.

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