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Economics - A Closed System

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A closed system is described as a tightly controlled wealth of services that are primarily concerned with communicating with its own system of elements while preventing outside partners from communicating. In a closed economic system only the domestic exchanges are counted and there is no engagement of export goods and services nor is there any importing of goods and services from other economies. Closed economies are able to operate on their own because all the goods and services that are used by the people are made in country. A company can operate as a closed system as is the case with Apple and its operating system control. Apple is a closed system because they only make products that are specifically designed and made to work with their operating system and products. When apple releases an iOS update that addresses bugs found with iPhone use it only affects those who specifically use the apple iPhone software. This makes the consumer experience with their products much better than those who use Android software. This is because Android software is shared amongst many carriers and cell phone manufacturers which means they would all have to operate the same page which is unlikely. In an open system goods and services are exchanged between different nations and there are clear lines of communication. Goods and services flow into and out of the system. Some open economies engage in limited interaction with their foreign sector and are mainly self-sufficient like the United States. Other economies engage in a great deal of interaction like Sweden for instance. In a closed-system the circular outer flow relates to the flow of money from the household to the business and vice versa (Editorial Board [EB], 2011, p. 29). The owners are the members of the household and they use the wages and rent as their income. That money is then used to buy goods and/or services from the businesses, in the inner flow. In turn the business uses the o

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