What is a key characteristic of a traditional economy?

A key characteristic of a traditional economy is that it is based on traditions and communal values. In this type of economy, the production and consumption of goods and services are guided by customs, rituals, and traditions that have been passed down through generations. Economic decisions are often made based on historical practices, and communities typically engage in farming, hunting, and gathering, relying heavily on what has been done before rather than on modern market dynamics or technological advancement.

In contrast to the other options, a traditional economy does not emphasize market competition, which is more characteristic of market economies. There is also little reliance on innovation and technology, as the focus remains on maintaining established practices rather than pursuing new methods or products. Lastly, traditional economies do not involve complete government control of resources; instead, resources are often shared among community members, reflecting the communal values that underpin this economic system.