A Traditional economy is one where the original economic system has stayed the same through traditions and customs. Traditional economies are usually found in farm-based and rural areas. They can be found mostly in Africa, Asia, the Middle East, and South America.
Advantages and Disadvantages
In a traditional economy, there are many advantages. Everyone has a determined role based on what they produce. Mostly everything that is produced is essential for survival, such as food and necessities. It is also a friendly environment. They trade with each other for what they need, and everyone is doing so with tradition, resulting in a cooperative relationship.
There are some disadvantages too. Supplies can be greatly affected by weather, since most of them rely on it. It is also a poorer economy, both in wealth and skill.
The Three Questions
What is being produced?
Most of the goods made in a traditional economy are necessities for survival. This includes food and supplies.
How is it produced?
Since a traditional economy is usually farm-based, most of the goods are grown on a farm or made with simple tools
Who is it for?
Everything made in a traditional economy is based off of traditions and customs. The economy is not very advanced, so it is all made for the community, traded with each other for survival.