A high rate of economic growth. This means an expansion in economic output; it will lead to higher average incomes, higher output and higher expenditure. Low and stable inflation (though if growth is very high, we might start to see rising inflation) Low unemployment.

A traditional economy is a system that relies on customs, history, and time-honored beliefs. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them. They use barter instead of money.

The main characteristics of a traditional economy are that the use of scarce resources, and nearly all other economic activity, is based on ritual, habit, or custom.

What are the advantages and disadvantages of a command economy? Advantages: Can quickly and dramatically change if needed by shifting resources. Disadvantages: It does not meet the demands of consumers, it does not give people a reason to work hard, and it requires a large decision-making government agency.

While a market economy has many advantages, such as fostering innovation, variety, and individual choice, it also has disadvantages, such as a tendency for an inequitable distribution of wealth, poorer work conditions, and environmental degradation.

Traditional Economy Countries 2021

The cons of the traditional economy It will result in fewer plants, and a lesser amount of farm products, shortage of food, and a general loss of income, which will affect the economy at large.

As a result of scarce resources, societies must answer three key economic questions: – What goods and services should be produced? – How should these goods and services be produced? – Who consumes these goods and services?

Most developed countries have mixed economic systems. Such a system has characteristics of both command and market economies.

Chapter 1 Vocabulary