An open economy is one that
A)has a large government sector.
B)lends and borrows in the international capital market.
C)produces mainly agricultural goods.
D)produces mainly manufactured goods.

Question

Quizplus · Accepted Answer

An open economy is one that engages in international trade and participates in the international capital market by both lending and borrowing. A and C are not accurate descriptions, as a country may have a large government sector or produce mainly agricultural goods without necessarily being considered an open economy. D is also not entirely accurate, as a country that produces mainly manufactured goods may or may not be open to international trade and capital flows.

An Open Economy Is One That