Ans. Ideally, in a closed economy, the demand for domestic goods and the demand for goods is considered similar. But in an open economy, the case is different; these terms have a separate meaning. Domestic demand for goods contains information on the domestic market demand of a country that is produced domestically or abroad. At the same time, the demand for domestic goods includes both foreign and domestic demand for goods.The domestic demand for goods has an increasing function in terms of income as goods are obtained by subtracting the value of imports and adding exports. Here the trade balance is the decreasing function of the output.