TOPIC : TRADE
First, What do we understand by TRADE? Well in a layman's definition Trade occurs when something is exchange for another. That's before money was invented people use goods to get other goods they want as long as it pleases the traders. This type of trade is called "TRADE BY BARTER" and I think some places in the world now people still practice this. Along the line, just after money was invented trade became more easier because money is generally and globally accepted in the exchange for goods and services. Well sometimes goods and services may be exchanged for credit instead in this case, buyers do not pay the seller immediately but at a proposed date agreed between them... So an acceptable definition of Trade is buying and selling of goods and services in exchange for money or credit. Let's head down to the types of trade:
TYPES OF TRADE
1. HOME/DOMESTIC TRADE : This is a type of trade that takes place within a country. Its not necessarily to be a citizen of a particular country to practice this trade for example [ foreigners in Nigeria who trade here could just be in a particular state in kano and carry on trade between that particular state and another state in Nigeria] yeah this is because it did not take place outside Nigeria's geographical territory. We also have two types of the home trade namely;
A.} Wholesale Trade - this is a kind of home trade whereby buyers purchase goods in large quantities from the producers definitely the profit for doing that is buying the lots of goods in cheap price and for the producer having sold his goods make money and even more if he produces more goods.
B.} Retail Trade - the second kind of home trade that takes place between wholesalers and the consumers. Here the quantity of goods sold to the consumers are usually smaller than what the wholesaler bought in bulk but the profit of doing that is the consumer pays at high price.
2. Foreign Trade : This is a type of trade that takes place or involves two or more countries it can be otherwise called "External Trade" but Economist call it "International Trade".. For example [ Trade between Nigeria and Ghana, America, China or South Korea]. Foreign trade is also in two different kinds, we have ;
A.} Imports : This a kind of foreign trade that involves buying from other countries into your country. Examples is importing electronics, machines, food items and cars from USA to Nigeria (my country).
B.} Exports : This is the second kind of Foreign trade that involves selling of goods and services from my/your country to other countries. For example, Well here in Nigeria, our main export is Petroleum that is sold to America, China, Japan and other countries and other exports like cocoa, Palm oil, etc.
😊😊 I hope we all following, drop a comment below if you don't understand any part I will respond as soon as possible.
Let's now look at the Aids to trade.
AIDS TO TRADE : There are several aids to trade. We will look at few of them.
1. BANKING : Banking aids trade in the following ways;
A. Money realised from trade are been deposited for safe keeping.
B. Granting of loans to customers who wants to engage in trade.
C. And providing facilities for receipts and payments on behalf of those involved in trade.
2. INSURANCE : Insurance are means of losses which results from different types of risk to be recovered. Examples of losses that can be recovered by insurance are fire, bulgary of goods and services in place of business, damage or loss goods while they are being transported to consumers.
3. Advertising : This is a means by which informations about products and services that seems available are provided to the consumers, it aids trade because without advertising, Consumers will have no idea of what to buy, where to buy and at what price to buy.
4. COMMUNICATION : Communication aids trade because it links buyers and sellers as a group to each other. It can be oral (via the phone or face to face meetings) or written (on form of letter and memorand). WWhichever way, it still aids trade.
OK THAT WOULD BE IT FOR TODAY'S LECTURE.. DONT FORGET TO DROP A COMMENT OR CONTACT US IF YOU DON'T UNDERSTAND.. THANKS 😊
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