StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Definition and Explanation of Closed and Open Economic Systems - Essay Example

Comments (0) Cite this document
Summary
The researcher of this essay aims to define and explain a closed system of the economy and provides an example on the subject. This essay also analyzes the contradictory counterpart of a closed economy, that is the open economy, where goods and services of a country flow in international terms…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.6% of users find it useful
Definition and Explanation of Closed and Open Economic Systems
Read TextPreview

Extract of sample "Definition and Explanation of Closed and Open Economic Systems"

Download file to see previous pages ic system are trading of goods and services at international levels and engaging in import and export of goods and services between various countries. Therefore there is no doubt that this leads to inner and outer flows. It may be goods and services in the form of import and export or the flow of resources, such as labor, capital and currency. The flow of labor is in two ways: emigration and immigration. Emigration means the outer flow of people to different countries, whereas immigration is the inner flow of laborers into the country. Capital flow refers to foreign trade investment. Defines and explains leakages in an open system. In the open system, a there is financial model that computes the goods and services exchanged nationally. The leaks in the open system include all transactions of foreign countries. “In an open system, taxes are included in the model to show government purchases and inject money back in to the economy” (The Mechanics of Open and Closed System, 2012, para. 4).  Funds being lost due to purchases of foreign facilities can also be seen in the open system. Another structure of leakage that can happen is when US industries outsource their capital OR labor to foreign countries. Even though the industry is saving and can currently make extra profits, the cash that is leaked may not be regained later. Define and explain injections in an open system. An injection happens when a foreign or individual company purchases American commodities or facilities. If a foreign industry hires workers belonging to the US, the wages deserved by the employees are measured and injected back into the financial system. Similarly, when the local government produces purchases in America or provides facilities like welfare, the cash is injected back into the...
This essay discusses the closed economy, that is the opposite of an open economy. In a closed economic country, that were analyzed in this essay all economic activities are conducted within the boundary of the country. Such an economy is an independent economy, which means the country does not accept imports from other countries and also does not export to foreign countries. The main objective of this type of economy is to make everything available for people within the confines of the economy. Thus, it can be stated that such a country will not engage in any type of trade or have even the slightest of interactions with other countries. However, it can be seen that in the modern times closed economic countries are very rare. For example, China was a closed economy earlier and then transformed into an open economy, when the China Government understood the benefits that come along with being an open economy. Hovewer, the researcher also mentions that Brazil remains one of the most closed economies in the world today. Today, an industry aims to give more US jobs in addition to create earnings from selling to foreign countries is the important example of injection. The company “green” was identified Wind Sail Reception, Inc. is situated in Nevada and has been creating turbines to change wind to power since the year 2002. The industry sells to American energy services and European services. The income created from the European market is measured a cash injection to the economy of the United States. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Definition and Explanation of Closed and Open Economic Systems Essay”, n.d.)
Definition and Explanation of Closed and Open Economic Systems Essay. Retrieved from https://studentshare.org/macro-microeconomics/1455158-taxes-system
(Definition and Explanation of Closed and Open Economic Systems Essay)
Definition and Explanation of Closed and Open Economic Systems Essay. https://studentshare.org/macro-microeconomics/1455158-taxes-system.
“Definition and Explanation of Closed and Open Economic Systems Essay”, n.d. https://studentshare.org/macro-microeconomics/1455158-taxes-system.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Definition and Explanation of Closed and Open Economic Systems

Effects of Human Resource Systems on Manufacturing Performance and Turnover

Most of these developments, not surprisingly, have come from communities of scholars focusing on their own particular countries or regions, be it the US (for example, Arthur, 1994; Delery and Doty, 1996; Huselid et al., 1997), the UK (for example, Brewster, 1999; Guest et al., 2003), elsewhere in Europe (for example, D’Arcimoles, 1997; Lahteenmaki et al., 1998; Roderiguez and Ventura, 2003). The difference in perspective on the value of people in organizations and the validity of HRM, particularly in non-Western Countries may be best understood in terms of the concept of locus of human value (Jackson et al., 2003). Jackson et al. (2003) came up with a conceptual map of international organization and human resource management...
12 Pages(3000 words)Essay

The Economic Impact of the Emergence of China and India

The main macroeconomic variable that toys in the global economy’s shift are the emergence of India and China as new superpowers. This emergence certainly has a number of implications, but among the most relevant are: disruption of the equilibrium of the global economy which results in rising demand of goods, giving way to worldwide inflation; the attractiveness of outsourcing to these countries due to low cost but high talent workforce of these countries for cheaper operations.
The growing middle class of China and India results in booming demand for the automobile industry. This increase in demand, with the increasing purchasing power of these countries’ people, is not limited to automobiles but more apparent in...
10 Pages(2500 words)Assignment

Gross Domestic Product and the Nations Competency in Terms of Economic Welfare

It is often used to compare the economic performance to aid as a prediction tool and to analyze the business cycles and the recessive and expansive economic performances within them. This further aid economic and fiscal policy formulation of the government and is also used to analyze the consumer behavior and the economic phenomena involved. (Heakal, R. 2008).These figures can be a benchmark to compare economies of different nations and the economic prediction process is also made possible.

A usual pattern of assessing the Gross Domestic Product is to have an initial GDP report on every quarter which is an advance report. Two corrective reports follow this before the final figures on GDP are arrived at. It usually takes...
7 Pages(1750 words)Report

Emergency Economic Stabilization Act of 2008 and How It Has Impacted the Financial Markets

Though there were objections from various quarters about the huge amounts of tax payer’s money being used in the bailout of huge corporates, the Act has been successful in moving the downturn towards a flat point and now has started slowly moving towards a recovery stage. The various programs under the EESA 2008 have played a significant role in the financial sector, housing mortgage, and banking institutions to save the institutions from complete disaster.

The Emergency Economic Stabilization Act is a huge taxpayer bailout designed to rescue the financial sector. The amount of money to be used is around $700 billion or $2000 per American citizen (Public mark up). Emergency Economic Stabilization Act of 2008 is al...
10 Pages(2500 words)Research Paper

Investigation of the Transient Behaviour of Earthing Systems Subjected to High Impulse Currents

The effect of the transient voltages and currents on the earthing systems has a great influence on the performance and evaluation of the substation equipment against lightning overvoltage. While the characteristics of the earthing system under steady-state depends on the electrode design and soil prosperities alone, the characteristics of the earthing system under impulse currents depends on the magnitude and shape of the impulse current. The experimental setup for the impulse tests on earthing systems has been designed with an impulse generator, voltage and current transducers and different types of earthing systems. The impulse tests with impulse voltages ranging from 500 V to 4 kV have been carried out and the impulse resistanc...
136 Pages(34000 words)Dissertation

Accounting systems and Assurance

The allocation of resources is dependent on the information regarding the financial condition of the firm. Here comes the role of accounting, which provides all the required financial information to the investors through several financial reports. There There are two classifications of accounting 1) financial accounting and 2) management accounting. Financial accounting is the one which furnishes all the financial information to the investors and management accounting is used at the micro-level where the internal allocation of the funds takes place. Accounting is one of the most crucial components of any organization as it provides all those financial information that is used to make the economic and financing decision making.&nbs...
9 Pages(2250 words)Coursework

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages(2000 words)Case Study

Business Information Systems

.... Thearling, K. (2009). An Introduction to Data Mining. Retrieved October 24, 2009, from Thearling.com: http://www.thearling.com/text/dmwhite/dmwhite.htm Ward, S. (2009). CRM (Customer Relationship Management ). Retrieved October 24, 2009, from About.com: http://sbinfocanada.about.com/cs/marketing/g/crm.htm Yusufa, Y., Gunasekaranb, A., & Abthorpe, M. S. (2004). implementation, Enterprise information systems project; A case study of ERP in Rolls-Royce, Int. J. Production Economics 87. 251–266....
8 Pages(2000 words)Case Study

International Business: World Economic Forum and Davos 2010

...Introduction Globalization, one of the most hotly debated issues means global capitalism to some while others consider it to be the continuation of modernism with the forces of wealth, progress, democracy and happiness at play (Kellner, 2002). Globalization is considered to be beneficial which promotes economic prosperity, cultural diversity and technological advancement. According to the critical social theory, technology and capital work together to create a new globalized and interconnected world. While each force of globalization is important, technological revolution has impacted the business models, value creation and differentiation (Spelman, 2010). The cloud computing technologies that have made the popular social networking...
7 Pages(1750 words)Coursework

Globalization and World Economic Forum at Davos 2010

... economy and national culture (Mittelman, 2000). World Economic Forum and Davos 2010 The theme of this annual meeting is to improve the state of the world and rethink, redesign and rebuild. This annual meeting was to rethink the business models, financial innovation and risk management. This rethinking is sought to trigger redesign attempts at the institutions at the national and international levels. The aim of redesign is to close the gaps in governance, prevent systemic failures and restore growth. This effort requires common vision, collaborative innovation and public-private partnership to succeed in the long term. The prerequisite would be to rebuild trust. The meeting focused on the following six areas of enquiry: 1. strengthening...
7 Pages(1750 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Definition and Explanation of Closed and Open Economic Systems for FREE!

Contact Us