Trade and Aids to Trade
Types of Trade
Home Trade is buying and selling of goods and services within international boundaries.
Foreign Trade is buying and selling of goods and services across the globe.
Aids to Trade
Services which are required to facilitate trade.
|Aids to Trade||Function|
|1.||Banking||Provides Finance and Services.|
|2.||Transport||Without means of transportation it is impossible to trade.|
|3.||Communication||To transmit and receive information quickly.|
|4.||Insurance||Absorbs some of the risks in production and trade.|
|5.||Warehousing||Provides storage facilities.|
|6.||Advertisement||Inform customers about products.|
Comparison of Home Trade and Foreign Trade
Similarities between Home Trade and Foreign Trade
- Buying and selling of goods for making profit.
- Serve mankind by satisfying needs and wants.
- Requires aids to trade.
- Require surplus to be created.
- Work on the principle of specialization.
Dissimilarities between Home Trade and Foreign Trade
|Home Trade||Foreign Trade|
|1.||Done within national boundaries.||Done across the globe.|
|2.||Same currency is involved.||Different currencies are involved.|
|3.||Same units of measurements.||Different units of measurement.|
|4.||Same government policies.||Different government policies.|
|5.||No taxes are involved.||Import/Export taxes are involved.|
|6.||Simple Documents.||Complex Documents.|
|7.||Same culture and language||Different culture and languages.|
|8.||Mode of Payment is cash, cheque etc.||Mode of payment is online transfer, bill of exchange etc.|
|9.||Mode of transportation is through land or rail.||Mode of transportation is through sea or air.|
|10.||Small and big quantities are involved.||Only large quantities are involved.|