What is GDP equal to in closed economy? - ProProfs Discuss
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What is GDP equal to in closed economy?

Asked by Muhammadakram, Last updated: Dec 01, 2020

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W. Mocroft

W. Mocroft

Love to do some charity work. Have a passion for writing and do it in my spare time

W. Mocroft
W. Mocroft, Philanthropist, Master Degree in International Business, Las Vegas

Answered Jan 02, 2019

A closed economy (and there are extremely few) means complete self-sufficiency. A closed economy means there is no trade activity with outside economies, no exports, no imports. The remote unvisited tribe in unexplored Brazil is an example.

Brazil itself is relatively closed, exports plus imports equalled just 27.6 per cent of GDP in 2013. GDP measure the nation’s total income and the total expenditure on its output of goods and services.

Consumption (C) Investment (I) Government Purchases (G) Net Exports (NE) = exports minus imports plus net tourism. In a closed economy there are no net exports. Therefore C and I are what must be considered.

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John Adney

John Adney

John Adney
John Adney

Answered Jun 15, 2017

Isn't it C + I + G? This would imply having government and the statement doesn't specify that.
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John Smith

John Smith

John Smith
John Smith

Answered May 31, 2017

C+i
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