Understanding Economic Systems: Traditional Economy

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15 Questions

What is the primary objective of an economic system?

To solve the basic economic problems of what, how, and for whom to produce

Which of the following is NOT a characteristic of a traditional economy?

Embracing new technologies

In a traditional economy, what is the primary basis for economic decisions?

Past experiences and practices

What is the primary focus of a traditional economy?

Culture and religion

Which of the following statements about traditional economies is true?

Production is carried out using primitive methods

What is the primary purpose of mines in a traditional economy?

To extract raw materials for production

In a traditional economy, what role do past experiences play in making economic decisions?

They are the sole basis for economic decisions

Which of the following is NOT a characteristic of a traditional economy according to the text?

Embracing new technologies

What is the primary focus of a traditional economy based on the provided text?

Religion and culture

Why are new technologies generally not welcomed in a traditional economy?

They conflict with traditional practices

What is the basis for economic decisions in a traditional economy?

Past experiences and traditions

Why is production carried out using primitive methods in a traditional economy?

As a form of respect for ancestors

What is the significance of communal land ownership in a traditional economy?

It promotes collective responsibility and resource sharing

What priority does the economy have in relation to culture and religion in a traditional economy?

Third priority

What determines the management of agricultural production in a traditional economy according to the text?

The leader's decisions

Study Notes

Economic Systems and Their Role

  • The four economic systems play a significant role in solving the problems of what, who, and for whom goods and services are produced.

Traditional Economy

  • Decisions are influenced by the past and based on copying or duplicating previous generations' decisions.
  • Production methods are primitive and based on traditional practices.
  • Characteristics:
    • Communal land ownership
    • Leader decides on agricultural production management
    • Production, distribution, and use of resources based on traditional practices
    • New technologies are not welcomed due to contrast with ancestors' practices
    • Economy is third priority, with culture and religion being foremost priorities
    • Mines are used to gather raw materials for production

Explore the concept of traditional economy and its role in answering the three fundamental economic questions. Learn about how decisions in this economic system are influenced by the past.

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