DECA Economics Practice Exam

A key feature of a traditional economy is its self-sufficiency and limited change. Traditional economies are typically based on subsistence farming, hunting, or gathering, with communities relying on their immediate resources to meet their needs. In these economies, production methods are often passed down through generations, leading to a stable way of life that doesn’t frequently change. The focus is on producing enough to sustain the community rather than maximizing efficiency or profits.

This characteristic stands in stark contrast to other types of economies. Rapid technological development and reliance on modern industrial practices are more common in market or industrial economies, where change and innovation drive production. Similarly, a high level of government control is associated with command economies, where the state makes all significant decisions about the economy and resources, which is not typical for traditional economies that operate on established customs and practices. Thus, the self-sufficiency and limited change represent the essence of a traditional economy, demonstrating its distinct nature compared to other economic systems.