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Definition of Open economy

Open economy involves no trade barriers, where exports and imports acquire a large percentage of the GDP. Open economy is the economic trade activities of goods and services between domestic community and outside such as people including businesses in the international backdrop and flow of capital as investment across the border.

How Open Economy works?

When the percentage of the GDP based on the foreign trade is taken into account, it is seen that UK is a more open economy than the US. But it is also truth that no country in the world gives unlimited access to its markets. Chile and Argentina are examples of two countries which have adopted and adopting open economy, moving from managed economy.

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