UPSC CSE Prelims
Question 69
A "closed economy" is an economy in which
View correct answer and explanation
Correct answer: D
Correct Option: D
Explanation: A closed economy has no international trade in goods and services, so exports and imports are absent in the simplified macroeconomic model.
Option-wise Analysis:
A: Incorrect - Money-supply policy does not define whether an economy is closed.
B: Incorrect - Fiscal deficit financing can occur in open as well as closed economies.
C: Incorrect - An economy with exports but no imports is not a standard closed economy.
D: Correct - it neither exports nor imports.