Question 17. What is trade and give any one definition.
Answer 17. Trade refers to buying and selling of goods and services for money or money worth. It involves transfers or exchange of goods and services for money or money's worth . The manufacturers or producers produces the goods, then moves on to the wholesaler, then to retailer and finally to the ultimate consumer. Trade is essential for satisfaction of human wants. Trade is conducted not only for the sake of earning profit, it also provides service to the consumers. Trade has taken birth with the beginning of human life and shall continue bas long as human life exist on the a earth. It enhances the standard of living of consumer . Thus we can say that trade is very important social activity.
DEFINITION
" The economic function of trade is to buy goods in the place where they are extracted or manufactured and to direct them to place where they are required. "
- STEPHENSON.
TYPES OF TRADE -
1. HOME TRADE
2. FOREIGN TRADE
When both the buyer and sellers are residing in the same country and some business transaction taken place between them , that is known as " home trade" . It is done within the territory of the same country , as for example , the trade done between the trader of Agra and Bengaluru will be known as Home Trade.
Foreign trade means the trade that is carried on between living in different countries or between govt. Of different countries . Foreign trade involves the use of foreign currency . In this way, the trade which one country carries on with another country is known as the foreign trade. For example , If India sells cotton to America , then it will be called as Foreign Trade.