Answer:-
In a closed economy, the government imposes restrictions on imports and exports to prevent international trade. This means that goods and services are produced and consumed domestically, without relying on foreign markets. The aim is to achieve self-sufficiency and protect local industries from international competition. Such a system might include tariffs, quotas, or outright bans on foreign goods. Additionally, the government may control currency exchange rates and limit foreign investment. These measures ensure that the economy remains insulated from global economic fluctuations, focusing on internal growth and stability.
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