What is an open market economy?

Question

Simple explanation please...
Thanks!

Answer 1

An open economy is an economy where there are no barriers to international trade.

A market economy is an economy where government does not regulate prices and allocation of resources.

Answer 2

Open Market Economy

Answer 3

Reading over what was said, 'Open market economy' appears to have different grades. A pure open market economy is an economy with no government, although that is impossible because you have to ensure contracts, private property rights and some time of legal system. Assume you can do that in a fair and equitable way, then you might have something most people think is an 'open market economy'. This type of economy would make it is easy to start a business, allow you to do whatever you wish to buy or sell. This is true internationally or nationally. Of course, some issues start to arise. For example, can I put a factory next to your house? Can I pollute the water you drink or the air you breathe?

The US is not a pure 'open free market economy', since the government regulates, taxes, and provides some goods like the post office, air traffic, education, utilities, welfare and charities, the post office. But, at the other end of the spectrum, you could imagine a place like the evil Soviet Union, which attempted to control all economic activity by making it subject to political will. In the middle are people like the Amish, who make strict laws about the kinds of technology that can pollute them, or the Navajo Nation, which runs many things on their reservations.

Answer 4

An open economy has few artificial barriers to trade. Artificial means "created by governments," as opposed to things like transportation costs that are inevitable. Examples of barriers to trade would be (1) a tariff (a tax on a good moving across a national border), (2) a quota (a cap on the amount of a good that is permitted to enter a country from abroad, or (3) various technical, product quality, and scientific requirements that are harder for a foreign producer to meet than a domestic producer. The opposite of an open economy is a closed economy.

A market economy is an economy like the US where many goods and services are supplied by free markets. Even in a market economy, some goods and services are supplied by governments, products such as water piped into homes, or US postal service, Medicare come to mind. The opposite of a market economy is a "command" economy, where all the decisions about what to produce and how to produce it are made by a group of government officials who are normally referred to as "central planners."

Answer 5

For the best answers, search on this site https://shorturl.im/axqMy

My call is : An earthquake causes a serious rupture in the Alaskan oil pipeline that will take 6 months to repair. Stagflation is usually initiated by a shock to the productive capacity of an economy EDIT The price ceiling itself could cause stagnation, but nothing is said about the monetary policy Educational opportunities and the price decrease are irrelevant. Fear of a recession could hypothetically be followed by monetary injections from central bank , but that won't necessarily cause stagflation

Answer 6

Mathematically may make it easier to see.

Here we have an open economy's GDP:
Y = C + I + G +Nx

Where C = consumption, I = investment, G = government spending and Nx = net exports

Here we have a closed economy's GDP:
Y = C + I + G

Notice there is no Nx and so no net exports (Exports minus imports), thus the economy is closed. An open economy allows for Nx.

Answer 7

An open economy is an economy where we can trade internationally without any barrier and the profit or gains that we get from trade can be used for development purpose.