In a simple, closed economy (no government or foreign sector), if disposable income increases by $500, and consumption increases by $450, then savings increases by 0.9
Typically, a closed economy is one where no trade or other financial transactions are conducted with any other nations. That indicates that no exports leave the country and no imports enter it. A closed economy aims for total self-sufficiency, giving domestic consumers everything they require from within its own borders. Although some economies are more closed than others, closed economies are more of a theoretical idea in the connected world of today.
Governments may use quotas, subsidies, and tariffs to shield a particular sector or industry from foreign competition even in nations with relatively open economies—a practice known as protectionism.
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