ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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. The main disadvantage of a traditional economy is that it tends to discourage new ideas and new ways of doing things.

Detailed explanation-2: -Definition. A traditional economy is a system that relies on customs, history, and time-honored believes. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them.

Detailed explanation-3: -Countries that use this type of economic system are often rural and farm-based. 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-4: -In an traditional economy individuals and tribes make the decisions. Often these decisions are based on customs, traditions, and religious beliefs.

Detailed explanation-5: -The traditional view has defined economic development as planned changes in the structure of the national product, change in the occupational pattern of labor force institutions, and technological adaptation to achieve predetermined or forecasted growth in the output of the nation.