Which type of economy is based on customs and traditions?

A traditional economy is characterized by its reliance on customs, traditions, and cultural practices that dictate how goods and services are produced, distributed, and consumed. In this type of economy, economic decisions often stem from historical methods passed down through generations, leading to a system where roles and expectations are clearly defined based on familial lineage and community practices.

In a traditional economy, individuals often engage in subsistence farming, barter systems, or craft production, with little emphasis on innovation or technological advancement. This structure is typically found in rural and less-developed areas where people rely heavily on agriculture and communal resources.

The other types of economies, such as market or command economies, do not prioritize customs and traditions in the same way. A market economy is driven by supply and demand, while a command economy is centrally planned and controlled by the government. A mixed economy incorporates elements of both market and command systems but does not primarily revolve around customs and traditions. Therefore, traditional economies distinctly emphasize longstanding practices and societal norms.