Question

Please no hand writing

1. Referring to an example, discuss what is a closed economy and an opened economy?

2. What do factor markets mean to you? If you have participated in these markets, which one ?

If not, which do you expect will be most important to you during your economically active life?

Answer 1

1. Closed economy is the economy in which there is no purchasing and selling of goods and services outside the border means there is no import and provide there domestic customers with the products produced domestically.

example - as if China is having 27% of closed economy which means they will be no imports and exports in the country as around 27% so that they can promote the domestic producers.

open economy is the economy where there can be any kind of trading between the countries.

example - as most of the countries now a days use to do the open economy trading like imports and exports in the international market.  

2. Factor market is the type of market in which all kinds of factors of production are purchased and sold. Like

labor market, raw materials market, capital market or entrepreneur market.  

An entrepreneur market is important because it helps in the creation of employment by this people gets job and with the help of this the capital market is being utilized and and for there production they use raw materials which they use to buy from. the raw materials market, hence this factor market is important in the economy.