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WEEK 4

Trade

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  1. Meaning and importance of Trade
  2. Forms of Trade: Home Trade, Foreign Trade;
  3. Aids to Trade: Banking, Insurance, Advertising, Communication, Transportation, Tourism, etc.
  4. Role of Custom and Excise in Foreign Trade

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Meaning of Trade

Trade can be defined as the process of buying and selling of goods and services. When one thing is exchanged for another, trade can be said to have taken place.

Importance of Trade

  1. Trade helps the producer to sell his/her goods to the consumer.
  2. Trade allows the consumer to have a variety of goods to choose from.
  3. It makes it possible for consumers to enjoy goods and services from other countries.
  4. It can lead to improvement in the standard of living of people.
  5. Good provided in surplus in one area are able to get to where it is not available.
  6. Trade brings the buyer and the seller together
  7. Trade gives value to a nation’s currency.

Forms of Trade

There are two forms/kinds of Trade namely:

  1. Home Trade or Domestic Trade
  2. Foreign Trade or External Trade

Home Trade or Domestic Trade

Home trade is trade that is carried out within a country .it can be at local, regional ,or national level . It is referred to as internal or domestic trade. For example, a trade between Lagos State and Anambra  State is referred to as Home Trade.

Home trade is further divided into Wholesale Trade and Retail Trade

  1. Wholesale Trade: This is concerned with the buying of goods in large quantities or in bulk from the producer and selling in small quantities to the retailer. The person who engages in wholesale trade is referred to as the Wholesaler.
  2. Retail Trade: this is concerned with the buying of goods in small quantities from the wholesaler and selling in smaller units directly to the final consumer. The person who engages in retail trade is referred to as the Retailer.
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Foreign Trade or External Trade

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