Question

Suppose "x" nation has a closed economy and nation "y" has an open economy , how could these nations determine the amount of spending ?

Answer 1

Country X, with a closed economy is independent of other economies because it neither imports nor exports (does not trade with other nations) while Nation Y trades with other countries because its an open economy. Therefore, Nation X determines its expenditure irrespective of trade barriers, tariffs, and exchange rates while nation Y determines its expenditure depending on prevailing rates, barriers, and trade tariffs.