ECONOMICS (CBSE/UGC NET)

ECONOMICS

ECONOMIC SYSTEMS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Who or what answers the basic economic questions in a traditional economy?
A
Individuals and Businesses
B
Government
C
Custom
D
Individuals, Businesses, and Government
Explanation: 

Detailed explanation-1: -Answer and Explanation: A traditional economy is one that takes its economic decisions on the basis of history, customs, and beliefs. In this economy, tradition guides economic decisions: What to produce, How to Produce and For whom to produce?

Detailed explanation-2: -Capitalism-individuals own the factors of production and answer the basic economic questions.

Detailed explanation-3: -Economists study the interactions between households and businesses and look at the ways in which the factors of production are combined to produce the goods and services that people need. Basically, economists try to answer three sets of questions: What goods and services should be produced to meet consumers’ needs?

Detailed explanation-4: -In a traditional economy, the government gets to decide the answers to the three basic economic questions. The given statement is TRUE. Traditional economies are dealt with and are based on certain pre-requisite norms, culture, and values.

Detailed explanation-5: -In an traditional economy individuals and tribes make the decisions. Often these decisions are based on customs, traditions, and religious beliefs.

There is 1 question to complete.