open economy

An open economy is one that engages in international trade and allows the free flow of goods, services, and capital across its borders. This means that countries import and export products, invest in each other's markets, and interact in global financial systems. An open economy benefits from increased competition, access to a wider variety of goods, and potential economic growth. However, it also faces risks, such as reliance on foreign markets and vulnerability to global economic changes. Essentially, an open economy connects a nation to the global marketplace, influencing its economic dynamics and opportunities.