Which term describes a system that relies on customs, history and time-honored beliefs to guide economic decisions on production and distribution.

• A. Theme
• B. Trace
• C. Traditional economy
• D. Veto

Answer: (C)

This question is about how a society makes choices about production and distribution. A traditional economy uses customs, history, and time-honored beliefs to guide those decisions. In such systems, what to produce, how to produce it, and for whom are determined by long-standing practices and social expectations rather than market prices or government plans. Resources often stay within families or communities, and exchanges may rely on barter. Change and innovation happen slowly because they can threaten tradition.

Other terms don’t describe an economic system: a theme relates to literature, trace means to follow or discover the origin of something, and a veto is the act of blocking a proposal in government.