Simple and Complex Economy
A simple economy refers to a system wherein people produce simple goods in limited numbers/quantities for the satisfaction of their wants. The barter system of exchange prevails in this economy. These types of economies existed in Indian villages in olden times.
A complex economy refers to a system wherein several kinds of goods are produced in large quantities. The process of production in these economies is highly complex and advanced. Money is widely used as a medium of exchange. This economy came into existence in the Post-Industrial Revolution period.
Difference between Simple and Complex Economy
| Simple Economy | Complex Economy |
|---|---|
| Only simple goods are produced to satisfy basic human wants. | A variety of goods are produced and in large quantities. |
| Techniques used in the production process are simple. | Techniques used in the production are complex and highly advanced. |
| A barter system is used for buying and selling goods. | Money is used as a medium of exchange for goods and services. |
| Wants are limited as people live in isolation and are self-sufficient. | Goods are produced in large quantities not only for self-use but also to be supplied and sold to distant markets. |
| It is a self-reliant economy. | It is a modern economy. |
Also, read Difference between Open Economy and Closed Economy