An economy that has its levels of output, employment, and prices affected by developments in other countries is:
A) an open economy.
B) a closed economy.
C) not a capitalist economy.
D) a pass-through economy.

Question

Quizplus · Accepted Answer

An open economy is one that interacts with other economies in terms of trading goods and services, and often capital and labor as well. This interaction means that developments in other countries can affect its levels of output, employment, and prices.

An Economy That Has Its Levels of Output, Employment, and Prices