Advantages and Disadvantages of Traditional Economy

Traditional economy can be defined as an economy which is based on customs and beliefs which people get from generation to generation. In simple words it is the economic system in which resources are allocated by inheritance. Traditional economy has some advantages as well as disadvantages here are some of them.

The main advantage of traditional economy is that this type of economics produces only those goods and services which are required for the survival or which they want to consume. Hence there is no surplus or wastage and hence it does not waste resources for goods and services which are unnecessary. Also in this economy people know exactly what their roles or job is and hence there is no duplication of effort.

However it suffers from certain disadvantages like this type of economy resist any changes because they tend to think that methods and procedures which are followed by their ancestors for generations are correct and hence which in turn leads to lower productivity thus leading to lower development of the society or country as a whole. Also due to this lower productivity people have lower standard of living than other economies which does not follow traditional economics. Also in this type of economies people have to do job which they are told to do but which they don’t like and hence it also lowers their productivity.

9 comments… add one
  • jasmin

    thanks i hate goverment homework 🙂

  • Robert

    Thank you my job is now simpler

  • kaya george

    thanks made my work simple

    • Vinish Parikh

      Thanks, i am glad you liked it

  • shukria

    please show us some more benefits and disadvantages of this economic system

  • Giwaz

    Thanks you made my homework simple

  • Retma demarrow

    Thank you a lot

  • Pablo chang

    This really helped me a lot!

Leave a Comment

Related pages

advantages of decentralization in an organizationdefine law of diminishing marginal utilityadvantages and disadvantages of imperfect competitiondividends defdifference between retail and wholesale bankingunearned revenue balance sheetmerits and demerits of globalizationadvantages of payback period methodloan vs overdraftthe advantages and disadvantages of globalisationmerits and demerits of globalisationwhat are the disadvantages of capitalismthe accounting for cash discounts and trade discounts areadvantages and disadvantages of borrowing money from a bankwhat is cash flow and fund flowtraditional economy meaningjain irrigation dvr share pricereturns inwards and outwardswhat is fii and dii in share marketdifference between autonomous investment and induced investmentexample of inferior goods in economicsexamples of diminishing marginal utilitystocks advantages and disadvantageshorizontal and vertical analysis of a financial statementunearned revenue earned journal entrywhen is a trial balance preparedsystematic and nonsystematic riskadjusting entry for unearned revenuedefinition of centrally planned economytypes of factoring methodsindirect quote currencyasba bankdisadvantages of marginal costingadvantages and disadvantages of forecastinglifo methodexample of derivative marketfixed exchange rate and floating exchange rateadvantages and disadvantages of chequesconsignor definitionadvantages of merger and acquisition pdfdupont identity formulapurchased goods on credit journal entriesprofitable ratioadam smith absolute advantage theoryinvestment appraisal payback periodsimilarities between socialism and capitalismexample of complement goodswhat is job specialization what are its advantages and disadvantagesexamples of veblen goodsppf fullformfmcg acronymadvantages and disadvantages of jit inventory systemhorizontal mergersmeaning of forfeitingadvantages and disadvantages of carbon creditsconsumer tastes and preferencesdictatorship advantagesdifference between unqualified and qualified audit reportwhat is full form of micrconglomerate diversification definitionexamples of a vertical mergerplanned economy disadvantagesdiminishing balance method of depreciationwhat does penetration pricing meandisadvantages of delegationwhat is the meaning of traditional economypros of urbanizationjournal entry for paying salariesformula of operating leveragepaid interest on loan journal entrydiscounting of bill of exchange