In a traditional economy decisions about which goods are produced ar based on: A. what businesses believe will generate the most profits. B. what the government decides is important for society. C. what the local community has made for generations. D. what goods are most likely to sell in international markets.

## Step 1<br />A traditional economy is an economic system in which traditions, customs, and beliefs shape the goods and services the economy produces. This type of economy is often found in rural areas with high levels of subsistence farming or hunting and gathering.<br /><br />## Step 2<br />In a traditional economy, the decisions about which goods are produced are based on what the local community has made for generations. This is because the economy is shaped by traditions and customs, which dictate what goods are produced.<br /><br />## Step 3<br />The other options, such as what businesses believe will generate the most profits, what the government decides is important for society, and what goods are most likely to sell in international markets, are more indicative of market economies, command economies, and mixed economies respectively. These types of economies are not characterized by traditions and customs dictating production.