A “closed economy” is an economy in which

[UPSC Civil Services Exam – 2011 Prelims]

(a) the money supply is fully controlled

(b) deficit financing takes place

(c) only exports take place

(d) neither exports nor imports take place


Answer: (d)        

Explanation:

  • A closed economy is characterized by the absence of trade with other economies.
  • It is self-sufficient, meaning there are no imports coming into the country and no exports leaving the country.
  • The objective of a closed economy is to fulfill the needs of domestic consumers solely from within its own borders.
  • However, closed economies can be inefficient due to the lack of access to raw materials produced elsewhere that are essential inputs for final goods.
  • Governments may protect specific industries from international competition using measures like quotas, subsidies, and tariffs.
  • It’s important to note that in practice, there are no nations with completely closed economies.

Consider the following statements:                                                                   The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

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Consider the following statements:                                                         The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India. The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgement can be made on it. Which of the statements given above is/are correct?

Consider the following statements:                                               

Read More »
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