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Question 4
4. (a) Explain what is meant by the term ‘Open Economy’. An open economy is one in which individuals and businesses can engage in trade of goods and services. This... show full transcript
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An open economy is one in which individuals and businesses can engage in trade of goods and services. This includes both importing and exporting these goods, as well as borrowing and lending in global financial markets. A significant measure of an economy's openness is reflected in the GDP percentage that is devoted to imports and exports.
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The implications of an open economy on Ireland’s economic development are multifaceted. It can fuel economic growth by creating employment opportunities, generating foreign currency for the country, and providing additional revenue for the government through taxes. Furthermore, an open economy facilitates the import of essential raw materials and finished goods, which can significantly enhance the standard of living. With a wider array of choices available, consumers benefit from potentially lower prices as competition increases.
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