(Answered) What does a close economy meanWhat does a close economy mean

➤ How does a closed economy affect GDP, savings, and investment?
In a closed economy, GDP equals domestic consumption, investment, and government spending: Y = C + I + G. Net exports are zero, so national saving must finance domestic investment. That identity (S = I) links household savings, government budget balances, and private investment, affecting the real interest rate and long-run capital accumulation.