ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Traditional economies are those in which customs and traditions are more important than money. Traditional economies are often based on hunting, fishing and gathering or farming. Often in a traditional economy, there is no surplus and no resources, and bartering is used to exchange for needed goods.

Detailed explanation-2: -Also known as a subsistence economy, a traditional economy is defined by bartering and trading. A little surplus is produced and if any excess goods are made, they are typically given to a ruling authority or landowner.

Detailed explanation-3: -A subsistence economy is an economy directed to basic subsistence (the provision of food, clothing, shelter) rather than to the market. Henceforth, “subsistence” is understood as supporting oneself at a minimum level.

Detailed explanation-4: -Each economy functions based on a unique set of conditions and assumptions. Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies.

Detailed explanation-5: -Examples of traditional economies include the central African Mbuti, the Australian Aborigines, and the Inuit of Northern Canada. The main advantage of a traditional economy is that the answers to WHAT, HOW, and FOR WHOM to produce are determined by customs and tradition.