Compared to a closed economy, an open economy is one that:
A) allows the exchange rate to float.
B) fixes the exchange rate.
C) trades with other countries.
D) does not trade with other countries.

Question

Quizplus · Accepted Answer

An open economy engages in international trade with other countries, while a closed economy does not. The exchange rate can either be allowed to float or fixed in both open and closed economies.

Compared to a Closed Economy, an Open Economy Is One