An open economy is a national economy that
A)has good relations with its neighbouring countries.
B)has a stock market that is open to traders from anywhere in the world.
C)has extensive trading and financial relationships with other national economies.
D)has established diplomatic relations with most other nations.

Question

Quizplus · Accepted Answer

An open economy is a national economy that has extensive trading and financial relationships with other national economies. It means that the country is highly integrated with the global economy and participates in international trade and investment. Good relations with neighboring countries or diplomatic relations with most other nations do not necessarily make an economy open. While having an open stock market can be a characteristic of an open economy, it is not a defining feature.

An Open Economy Is a National Economy That