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An economy in which goods, services, and resources are permitted to flow freely with very little rather than no restriction. The flow of capital (physical, human, and financial), labor, and entrepre neurial skill normally constitute a significant proportion of international exchange or trade. For this reason, the [Page 359]expression is also used to describe countries for which international trade constitutes a substantially significant proportion of national income or gross domestic product (exports and imports as a percentage of gross domestic product).
The degree to which an economy is open depends on a number of political and economic considerations. For example, dictatorial regimes tend to have a tight control over the money supply, imports, investment (including capital flows), and the use of international currencies. Inflation, output, and ...