Question

Write short notes on the following.

Classification of trade

Answer 1

Trade can be classified into external trade and internal trade.
i. External trade: The trade that takes place between two or more countries is known as external trade. The following are the various forms of external trade:
a) Import trade: It refers to the purchase of goods and services from foreign countries in order to consume them in the native country.
b) Export trade: It refers to the selling of goods and services of the native country to foreign countries.
c) Entrepot trade: It involves importing goods from a foreign country with the purpose of exporting them to another country at a higher price.

ii. Internal trade: The trade that takes place within the national boundaries of a country is known as internal trade. Following are the two forms of internal trade:
a) Wholesale trade: It refers to the buying and selling of goods in large quantities for the purpose of resale or intermediate usage.
b) Retail trade: It refers to the buying of goods and services in relatively less quantities than the quantities bought in wholesale trade.