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