ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Traditional economies rely on habit, custom, or ritual to decide what to produce, how to produce it, and to whom to distribute it. In a centrally planned economy the central government makes all decisions about the production and consumption of goods and services.

Detailed explanation-2: -Traditional Economy-The production of goods and services are based on a particular society’s traditional customs or beliefs; people will make what they have always made and will do the same work their parents did; exchange of goods is done through bartering.

Detailed explanation-3: -produced in a traditional economy is the tribe or family group. government planning groups make the basic economic decisions for the workers. what goods and services will be produced, what wages will be paid to workers, what jobs the workers do, as well as the prices of goods.

Detailed explanation-4: -In command economies, the government controls the factors of production and answers the 3 economic questions of what, how and for whom to produce for all of society. Command economies often associated with socialism, communism and authoritarianism.

Detailed explanation-5: -How does a traditional economy answer the questions of what, how, and for whom to produce? Rituals, habits, or customs. How does a command economy answer the questions of what, how, and for whom to produce? A central authority makes the major decisions about WHAT, HOW, & FOR WHO to produce.