Which of the following is a characteristic of a traditional economy? MCQ with Answer and Explanation

Question
Which of the following is a characteristic of a traditional economy?
A. Customs and traditions determine economic decisions
B. High use of advanced technology
C. Rapid industrialisation
D. Extensive use of money and banking
Answer: Option A
Solution (By JKSSB Mock Tests)
In a traditional economy, economic decisions regarding production and distribution are based on customs, traditions and hereditary practices.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
The 'Human Capital Formation' includes investment in:
A. financial assets
B. education, health and training
C. physical infrastructure only
D. machinery
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Correct Answer: Option B

Explanation:
Human capital formation involves education, health and training investments.
This question belongs to: Economy GK Economy Set 1
Question #2
In the context of trade policy, 'Import Substitution' strategy aims at:
A. Promoting exports through subsidies
B. Complete free trade
C. Replacing imports with domestic production through protection
D. Only reducing tariffs
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Correct Answer: Option C

Explanation:
Import substitution industrialisation seeks to reduce dependence on imports by protecting and promoting domestic industries through tariffs, quotas and other measures.
This question belongs to: Economy GK Economy Set 1
Question #3
Transfer payments are excluded from national income because they:
A. are included in personal income
B. do not correspond to current production of goods and services
C. are paid in cash
D. are paid to foreigners
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Correct Answer: Option B

Explanation:
Transfer payments are one-sided payments with no corresponding production of goods or services.
This question belongs to: Economy GK Economy Set 1
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