<u>The government would impose restrictions on a closed economy to prohibit trade with other nations.
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Further Explanation:
Economy:
The economy means the place in which the goods are produced and sold out to the customers. The economy includes all types of items that can be traded whether it is investments, produced goods, capital investment, and the financial instruments. There are two types of economy in all the market, which is open economy and closed economy.
Open economy:
An open economy refers to a type of economy in which the government does not put any restrictions on international trade. The country can exchanged goods with any country. The individual, company, and institutions can be invested in any country.
Closed economy:
The closed economy is a type of economy in which the government puts restrictions on international trade. The country cannot exchange goods with any country. The individual, company, and institutions cannot be invested in any country. The government put restrictions on the trade. The government may increase the excise duty on all goods, it will decrease the import from the other nations. As increasing the excise duty, it will rise up the price of foreign goods and the good become expensive. The government may increase the customs duty on all goods, it will decrease the import and export from the other nations. As increasing the custom duty, it will rise up the domestic good of the price and the good become expensive.
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Answer details:
Grade: Middle School
Subject: Economy
Chapter: Closed economy
Keywords:restriction, would the government, impose, type of economy, a closed economy, Open economy, produce goods, investment, financial instruments, excise duty, custom duty, foreign good, domestic good.
