• Explain the differences in the operation of close and open economies by citing any relevant example to support your answer.

Introduction

Malaysia is a place of trading for business within the business is large or small. Every buying or trading also got sees the economic in Malaysia or country when they start their business. When the economics of each country is decrease they did not have any buyer or supplier will do business and invests in there. Example is North Korea. Open economic is mean can import and export with other country. That mean the country is a place to doing trading or business. The advantages for open economic for each of country is can do trading and gets a good product using trading and the disadvantage is high cost. The advantage for closed economic is don’t need to spend any money in trading and it also can increase the sale of their country product. Disadvantage for closed economic is can now get a satisfaction with other product because no choice and change the use any product are import because as a closed economy world they cannot doing trading with other country.

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Close economic

Closed economic is a self sufficiency world without get any commendation from customer because they did got any trading with other country. They citizen also only can accepted and satisfied own country product because they only satisfied the product are process in own country is quality compare with other country.

Isolation

I choose North Korea as my closed economic because the country is controlled by army so the product also cannot go out the country using trading. They also cannot get a trading partner with other country like product and daily need because the entire thing is army prepare to citizen.

Trading cost

Why businesses don’t have in North Korea it is because when any trading are started the tax are taken by army is high. The citizen also can save move cost because no trading and transportation. The cost of trading also fix by army. So, the free for export and import is high. The army also got a law for citizen for their country for who are transport thing in own country. The things are want to transport out of the country also limited because they don’t want their country brand are using by other country citizen. The cost also will gain less cost compare with open economic because close economic transit cost is high than open economy. So when other country sales the thing is import from close economy world also cannot earn more profit when doing business.