The definition of a closed economy and the practical realities of global trade are key. Protectionist policies can reduce trade openness but do not create a truly closed economy. Faster growth is generally associated with open economies due to competition, specialization, and access to larger markets and resources.
Which of the following statements is/are correct? I. A closed economy is an economy that does not participate in international trade, i.e., it does not import or export goods and services to/ from another country. II. A closed economy grows faster than open economies as all goods must be produced and consumed from within the country. III. There is no closed economy that exists today, but some countries use protectionist policies to restrict trade, making them more closed than others. Select the correct answer using the codes given below.
Asked in GS AE PHE 28 2023 1406 2024 · Topic: Nature of Indian Economy (Openness of Economy and Integration with Global Markets)
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