Traditional Economy

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Definition of a Traditional Economy:

A traditional economy is an economic system that relies on cultural customs and ancestral traditions to determine what is produced, how it is produced, who produces it, and how it is distributed.

Detailed Explanation:

Imagine living in an economy where there are no stores. If your family needs meat, someone hunts. You would grow your grain and vegetables, make your clothes, and build your shelter. Perhaps your neighbor returns from a very productive hunt. You trade some clothing for food. This kind of trade is barter or the exchange of two goods or services without using money. Many cultures living in very isolated areas rely on bartering. These include the Australian Aborigines and Amazon tribes. These people live in traditional economies. Traditional economic systems rely on cultural traditions to govern the production, distribution, and consumption of goods and services in a society. People primarily rely on bartering, farming, hunting, and gathering in these societies. Their family ties and gender determine many facets of individuals’ lives, including job, economic, and social status.

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