Basis

Open economy

Closed economy

1. Economic relation

It has an economic relationship with the rest of the world.

It has no economic relationship with the rest of the world.

2. Import and export

It is involved in the import and export of goods and services.

It is not involved in the import and export of goods and services.

3. Borrowing and lending

An open economy borrows and lends money.

A closed economy neither borrows nor lends money.

4. Foreign aid

It takes and gives foreign aid.

It neither takes nor gives foreign aid.

5. Movement of  workers

It allows inward and outward movement of workers.

It does not allow inward and outward movement of workers.

6. Remittance

An open economy receives remittance.

A closed economy does not receive remittance.

7. Realistic and theoretical

It is a realistic concept because all the economies of the world are open economies.

It is only a theoretical concept because there are no closed economies in the world.

8. Equality between GDP and GNP

In this economy, GDP and GNP are different.

In this economy GDP and GNP are equal.