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Are the Concepts of Demand for Domestic Goods and Domestic Demand for Goods the Same? - Economics

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ConceptForeign Exchange Market Foreign Exchange Rate

Question

Are the concepts of demand for domestic goods and domestic demand for goods the same?

Solution

In a closed economy, the demand for domestic goods and domestic demand for goods are similar terms. However, in an open economy, these two terms have different meanings. Demand for domestic goods includes both domestic and foreign demand for domestic goods. Whereas, domestic demand for goods refers to the domestic market demand of a country, that is either produced domestically or abroad (foreign countries).

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APPEARS IN

 NCERT Solution for Class 12 Economics - Introductory Macroeconomics (2014 to Current)
Chapter 6: Open Economy Macroeconomics
Exercise | Q: 9 | Page no. 101
Solution Are the Concepts of Demand for Domestic Goods and Domestic Demand for Goods the Same? Concept: Foreign Exchange Market - Foreign Exchange Rate.
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