Which term describes an economy that is heavily dependent on international trade?

An economy that is heavily dependent on international trade is accurately described as an open economy. In an open economy, the country engages in trade with other nations, allowing goods, services, and investments to flow across its borders. This participation in the global market enables the economy to benefit from comparative advantages, such as accessing diverse resources and expanding markets for domestic products.

A closed economy, in contrast, does not engage in international trade and relies solely on domestic production to satisfy its needs. An isolationist economy prioritizes self-sufficiency and avoids foreign influences, which further separates it from the concept of open economies. Lastly, a protectionist economy typically implements strong trade barriers, such as tariffs and quotas, to limit imports in favor of domestic businesses, which is also contrary to the principles of an open economy. Thus, the term open economy best captures the essence of a system reliant on international trade.