ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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-3: -Traditional Economy: A system which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation.

Detailed explanation-4: -What is Traditional Economics? Traditional economic theory relies on three fundamental assumptions: People are rational. People make decisions based on self-interest. People will change their thoughts and beliefs based on new information.