Rather than being backed by money, traditional economies generally depend on ____ to support their economy.
1. competition and surplus
2. skills and traditions
3. bartering and trade
4. stocks and bonds
2. skills and traditions
The correct answer is option 2, skills and traditions.
Traditional economies rely on the skills and knowledge of individuals within a community, as well as the customs and traditions that have been developed over generations. In a traditional economy, people often engage in subsistence farming, fishing, hunting, or other traditional crafts and trades to meet their basic needs. They typically produce goods for their own consumption or to trade within their community.
To arrive at this answer, one can eliminate options 1, 3, and 4 by understanding their characteristics and how they differ from a traditional economy.
Option 1, competition and surplus, refers more to market-based economies where goods and services are produced for profit and consumers have choices between different providers. It also implies the accumulation of surplus, which is not a prominent feature in traditional economies.
Option 3, bartering and trade, does involve exchange, but it is not exclusive to traditional economies. Bartering and trade exist in various economic systems, including more modern ones.
Option 4, stocks and bonds, relates to financial markets and investment instruments that are commonly associated with market-based economies, rather than traditional ones.
By process of elimination and understanding the characteristic features of a traditional economy, we can determine that skills and traditions are the factors that support these types of economies.