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TOPIC: TRADE.
CONTENT:
- Meaning of trade and types
- Relationship between/among the different, types of trade.
SUB TOPIC 1: MEANING OF TRADE AND TYPES OF TRADE MEANING OF TRADE
Trade is the act of buying and selling of goods and services. People trade with the aim of making profit in order to cater with their needs.
(1) Home /Local/Internal/Domestic Trade
(2) Foreign/external/International Trade
(3) Entre-port
Home /Local/Internal/Domestic Trade: This is the buying and selling of goods and services within a country. Buying of goods and services that take place in from Lagos to Port Harcourt, Onitsha and Aba is home trade. It is within Nigeria.
Type of Home /Local/Internal/Domestic Trade
- Retail Trade: Retail trade is when the retailer buys goods in small quantity from the wholesaler or the manufacturer and sells them in bits to the final user (consumer).
- Wholesale Trade: This is trade in which the purchaser buys goods in bulk or large quantity from the producer or Manufacturer and sells in small quantity to the retailer.
- Foreign/external/International Trade: Foreign trade is buying and selling of goods and services involving countries of the world. Foreign trade is the exchange, buying and selling of goods and services between two or more countries. When Nigeria sells crude oil and gas to Japan, China or the United Kingdom, it is international trade.
Types of Foreign/external/International Trade
- Export trade: This is the selling of goods and services produced in one country (Say Nigeria) to other countries.
- Import trade: This is when businessmen in Nigeria buy goods from foreign countries for the purpose of selling them within the country. Whether goods are bought from overseas by individuals, governments, schools or business organisations, import has taken place. Items such as electronics, video games, computers, motor vehicles and machines are imported from other countries.
- Entre-port: This is the re-selling of imported goods by one country to another without changing or transforming the goods. Entre-port is also known as re-exporting. For example a businessman imports computers games from Japan to Nigeria, instead of selling them in Nigeria; he sends them to Ghana where he is paid in foreign currency. It is called entre-port.
RELATIONSHIP BETWEEN HOME AND FOREIGN TRADE
- Currency is the medium of exchange. May be local or foreign currency.
- Profit is the motive behind any form of trade.
- Revenue is earned for the government.
- Warehouses are used to keep goods.
- Middlemen are involved in the trading activities.
- Trade leads to economy growth.
- The needs or wants of consumers are met.
DIFFERENCES BETWEEN HOME AND FOREIGN TRADE
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