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When an economy is open, this basically means
that it imports and exports goods and services.
What are the benefits of doing this? First of all, if
you trade with other economies, you can import
goods that do not exist in your economy. These
may be products that your economy cannot
manufacture, but they may also be raw materials.
With a wider range of raw materials, an economy
is able to use its capital and labour to produce a
wider range of products. In this way, importing
can actually help an economy grow. What’s more,
if you allow imports from other countries, then
you will have trading partnerships. This means
that you can export to countries. If you have
customers all over the world, your economy will
grow faster.