Final answer:
The distinction between small open economies and large open economies is based on the size of the economy, the geographic location, the history of trade, and the level of government intervention. Large economies like the United States can produce most of what they need internally, while small economies like Sweden rely more on international trade. Additionally, nations that are neighbors tend to trade more. The correct option is C.
Step-by-step explanation:
The distinction between small open economies and large open economies is based on three main factors: the size of the economy, the geographic location, and the history of trade. Large economies like the United States have the ability to produce most of what they need internally and have lower ratios of exports and imports to GDP. On the other hand, small economies like Sweden have higher ratios of exports and imports to GDP because they rely more on international trade to provide what they want internally.
In addition, nations that are neighbors tend to trade more due to lower costs of transportation and communication. Another factor that distinguishes economies is the level of government intervention. Some nations have market-oriented economies with minimal government interference, while others have command economies where the government controls most economic activities. These differences in economic institutions, as well as political, religious, and social institutions, contribute to the distinctions between small open economies and large open economies.