Which type of economy is guided by traditions and may utilize barter instead of money?

In a traditional economy, economic decisions are primarily based on customs, beliefs, and historical precedent. This type of system is often characterized by subsistence farming or hunting, where families or communities rely on bartering goods and services rather than utilizing a standardized currency. The exchange typically occurs within small communities where people know each other and understand the traditions that govern the transactions.

The traditions in a traditional economy dictate how the economy operates, including what goods are produced, how they are distributed, and the methods of trade. This system is usually found in rural or underdeveloped areas where modern economic practices and monetary systems have not yet been fully adopted. Understanding this context helps clarify why the characteristics of a traditional economy align closely with the use of barter and a lack of reliance on money as a primary means of exchange.