What Restriction Would The Government Impose In A Closed Economy?
A. The government would prohibit trade with other nations.
B. The government would set the prices for imported goods.
C. The government would preserve traditional customs only.
D. The government would prevent private ownership of property.
Answer: A : The government would prohibit trade with other nations.
Brief Explanation:
An economy is where businesses and individuals’ production and consumption activities are interrelated. This domain also determines how resources are used in general.
- A closed economy is one where everything stays “within” the particular area.
- In other words, a closed economy is one where trading is done within one economy.
- In this form of economic activity, outside factors or businesses have no involvement or participation.
- This means that the government of one nation prohibits other nations from its trade.
- It only allows trade within the nation and does not allow outside participation.
An economy where trading is done within itself or one nation and prohibits outside nations from getting involved is known as a closed economy. Thus, the correct answer is the first option.
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