Every country or nation in the world has what we call the economic system that it uses. Through economic systems, countries are able to answer three central economic questions. What to produce? How to produce? For whom to produce? However, each of the four economic systems is different from the other, giving them their own characteristics. The main characteristics of economic systems are the ownership of resources or factors of production as well as the level of role played by the government. These are important elements to consider when analyzing economic systems because they are the driving force of each system. Scarcity is why countries must answer the three central economic questions, since factors of production are limited in every economy. The systems not only provide answers to the three questions but they also have the consequences that accompany each of them in their use on the economy. We can say that they have advantages and disadvantages or advantages and disadvantages. Their use also has a different impact on the economy. We will begin by analyzing the traditional economic system, one of the four systems that will be discussed. TRADITIONAL ECONOMIC SYSTEM The traditional system is the easiest to understand and very surprising, it makes you wonder why we even had it as an economic system. The system uses the application of ancient methods from generation to generation. This means that the same production and distribution of goods remains the same from generation to generation. This argument is supported by Mohr and Fourie (2008: 26): the traditional system mainly concerns traditions, customs and beliefs. Countries that use this type of system are often rural and agricultural. This is that some sub...... middle of paper ...... financially supported by the government to start their own business. Small, medium and micro enterprises (SMMEs) are increasingly playing a role in South Africa's economy and development. SMMEs are said to be responsible for a large percentage of job creation in South Africa. If the South African government could invest more money into SMME, it would not only reduce unemployment but also the economy would grow. Everyone will benefit because as SMEs start to grow into large businesses, they will pay large amounts of tax due to the profits they make. This will enable the government to obtain more revenue to provide necessary public goods and services and also build new infrastructure. South Africa has a lot of potential, it's up to government and business to get our economy where it can go..