In a traditional economic system, how are economic decisions such as production and distribution typically determined?

• A. By private individuals seeking profit
• B. By market forces of supply and demand
• C. By customs, traditions, and cultural beliefs
• D. By government planning and regulation

Answer: (C)

Verified step by step guidance

1. Understand that a traditional economic system is one where economic decisions are primarily influenced by long-established customs, traditions, and cultural beliefs rather than by modern market mechanisms or government interventions.
2. Recognize that in such systems, production methods and distribution patterns are passed down through generations, often based on historical roles and community practices.
3. Contrast this with other economic systems: market economies rely on supply and demand, command economies depend on government planning, and mixed economies combine elements of both.
4. Identify that private individuals seeking profit is characteristic of market economies, not traditional ones.
5. Conclude that in a traditional economic system, economic decisions are typically determined by customs, traditions, and cultural beliefs.