Page 8 - FLIP BOOK ECONOMIC PROBLEMS AND HOW TO SOLVE THEM BY SELA PUTRI AGUSTIANI

 There are no production households and consumer households. Fulfillment of
community needs is done by barter.
 There is no technology to produce goods.
 Production techniques are simple, such as farming, gardening, and hunting.

Pros and Cons of Traditional Economic System

Although simple, the traditional economic system has several advantages, namely the absence of
exploitation of natural resources and human labor. This is because people are reluctant to seek
profit, but only fulfill their daily needs. The chance of conflict between communities is small,
Brainies. Meanwhile, the disadvantages of the traditional economic system are limited
production, slow economic growth, and goods that have no value when bartering. For example,
you want to eat boiled cassava. Finally, you exchange 1 chicken to get a plate of boiled cassava.
In fact, the exchange rate of chicken is much greater than cassava.

 Liberal Economic System

The liberal or market economic system is an economic system that gives people the freedom to
carry out production, distribution and consumption activities. Unlike the traditional economic
system that only fulfills daily needs, the goal of the liberal economic system is to seek as much
profit as possible.The role of the government is only as a supervisor, even almost nonexistent.
The market economic system is in line with Adam Smith's theory, "Laissez Fairre, Laissez
Passer," which means that economic activities must be left to the community. This economic
system is widely adopted by countries in the Americas and Europe, such as the United States,
Britain, or Germany.

Characteristics of the Liberal Economic System:

 The community is divided into 2 groups, namely the employer group who is free
to determine their field of business, and the recipient group who is free to choose
the job they want.
 People are given the freedom to buy means of production using their own money.
 There is competition between communities.
 The role of government is minimal.
 Economic activities always consider market conditions.

Pros and Cons of the Liberal Economic System

As said at the beginning, the state gives freedom to the people to run the wheels of the economy.
People who act as producers are free to innovate to create products. On the other hand, people

who are consumers have a wide selection of quality goods, but they are not allowed to buy them.
Sellers with little capital can lose to entrepreneurs with high capital. They will lose in terms of