A traditional economy is an economic system where customs, traditions and beliefs determine the goods and services created by the society. It is dependent on agriculture, hunting and gathering, fishing or any combination of the above. Also called a subsistence economy, it may involve use of barter trade instead of currency.Continue Reading
A traditional economy is usually underdeveloped with minimal economic growth. It is often dominant in rural and farm-based countries. Limited surplus is produced, and excess goods are usually given to the ruling authority or landowner.
Typical examples of traditional economies as of 2014 are the Inuit or those of the South India tea plantations. This type of economic system is considered “primitive” or “undeveloped,” having technologies or tools perceived as outdated. People living in such an economy are regarded as living in poverty, even if their daily needs are satisfied. However, traditional economies are usually less environmentally destructive than sophisticated ones may be.
Traditional economies are popular in emerging markets or developing world countries. For instance, they can be found in parts of Africa, Asia, the Middle East and Latin America. Some forms of traditional economies, however, are present virtually all over the world. Traditional economic systems are expected to eventually evolve into a mixed, market or command economies.Learn more about Economics
A planned or command economy is one in which major functions, such as production and distribution of goods, are controlled by the government. In a planned economy, the government owns some or all production facilities and decides what to produce and how goods are priced. This is in contrast to a market economy, where production and distribution are decided by market forces with little or no government intervention.Full Answer >
According to Investopedia, microeconomics is the study of decisions made by people and businesses regarding the allocation of resources and prices of goods and services, while macroeconomics is the study of the behavior of the economy as a whole. Microeconomics focuses on individual companies, and macroeconomics looks at countries and governments.Full Answer >
Brazil's economy classifies as free market, which features an exchange of goods, services and commodities internally and with other nations. Brazil varies in degree of economic freedom; in the early 2000s, Brazil's economy classified as mostly free, then waned in status to a status of "mostly unfree" in the latter half of the decade.Full Answer >
The aggregate demand curve, which illustrates the total amount of goods and services demanded in the economy at a given price level, slopes downward because of the wealth effect, the interest rate effect and the net exports effect, according to CliffsNotes.com. The curve measures the price level on the vertical axis and gross domestic product (GDP) on the horizontal axis.Full Answer >