Question

Discuss the importance of commerce as an economic activity.

Answer 1

Commerce embraces all those activities which are necessary for maintaining a free flow of goods and services. It is very important because it removes the following hindrances of trade to ensure smooth production and distribution of goods.

(a) Hindrance of person removed by trade there by making goods available to the consumers from the producers.

(b) Hindrance of place removed by transportation.

(c) Hindrance of time removed by warehousing

(d) Hindrance of risk removed by insurance.

(e) Hindrance of information is removed by advertising.

(f) Hindrance of finance is removed by banking and financial institution.