What is a limitation of a traditional economic system?(2 points)
Responses
Lack of economic stability
Lack of economic stability
Lack of economic growth
Lack of economic growth
Lack of government intervention
Lack of government intervention
Lack of individual freedom
The lack of economic stability is a limitation because traditional economic systems rely heavily on supply and demand forces, making them susceptible to fluctuations and economic downturns. This can lead to unemployment, inflation, and overall economic instability.
The lack of economic growth is another limitation as traditional economic systems often prioritize maintaining existing industries and practices rather than encouraging innovation and diversification. This can hinder technological advancements and limit overall economic development.
Note: It is worth mentioning that the other two options, lack of government intervention and lack of individual freedom, are not commonly considered as limitations of traditional economic systems, but rather characteristics that distinguish them from other economic systems such as command economies or free-market economies.