Chapter 28: National Income

1. What is the difference between a closed economy and an open economy? 

A closed economy is an economy where there is no foreign trade while an open economy is one where there is trade with other countries. 

1. What are the ways of measuring output of an economy? 

• National Income 

• National Output 

• National Expenditure 

1. What is the function of households to firms? 

They supply factors of production (land, labour, & capital) to firms in return for income, which is used…