Q:

What is a traditional economy?

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Quick Answer

In a traditional economy, products and goods are created as a result of traditions, customs and beliefs. Countries with a traditional economy use the barter system or trading as a primary form of currency. This type of economic system is generally found in rural areas or farm-based areas.

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Full Answer

A traditional economy utilizes hunting, gathering and cultivation as the main forms of work. Countries with large indigenous populations and third-world countries generally have a traditional economy that barters products or goods as a method of sustaining the economy. In many of these areas, there is not an established form of currency. In this type of economy, wealth is created and received by the upper classes.

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