Classwork Series and Exercises { Business Studies – JSS2}: Division Of Commerce

Business Studies Jss 1

Week 2

Topic: Division of Commerce

Contents:

• Trade
• Division of Trade
• Differences between Home trade and Foreign trade

A. Meaning of Trade

Trade is the act of buying and selling and exchange of goods and services. It is the major part of commerce.

B. Division of Trade

Trade can be divided into two divisions. These are Home or domestic trade and Foreign or international trade.

Home Trade/ Domestic Trade

Home trade can be described as buying, selling and exchange of goods and services among people living in the same country. E.g. A woman buying goods from Oyo state and traveled down to Sokoto to sell the goods.

In home trade, the same currency is used and there are no trade barriers like custom duties, tariffs, import duties, etc. Home trade can be subdivided into (a) wholesale trade and (b) retail trade.

Wholesale trade: It involves the buying of goods in large quantity from the manufacturers and selling in small quantities to the retailer. Traders who are involved in wholesale trade are called the wholesalers. Wholesalers buy in large quantity; therefore they must have large capital and big warehouse for their stocks.

Retail trade: A person who involve in retail trade is called a retailer. Retail trade is the buying of many products in small quantities and selling them to the final consumers in units or bit by bit. A retailer sells directly to the final consumer.

Foreign Trade: The foreign trade is also known as the International trade; It is the trade between the people of one country and the people of another country. E.g trade between Nigeria and Japan. It involves the use of foreign currencies to pay for goods and services bought from other countries. Foreign Trade can be sub divided into import, export and entreport.

C. Differences between Home and Foreign trade  

Home Trade	Foreign Trade
1.      No trade barriers is involved	There is trade barriers
2.      It involves the use of only one currency	Two or more currencies are involved
3.      Most goods and services involved are  produced locally	Most goods imported are foreign made goods
4.      Goods and services produced moved within the country	Goods and services produced move from one country to another
5.      Home trade is also called domestic trade	Foreign trade is called international trade
6.      The cost of transportation is less	Cost of transportation is high
7.      Goods produced are not usually expensive	Foreign goods are usually expensive

Test and Exercise

1. Which one of these is not an aid to commerce (a) warehousing (b) banking (c) wholesaling (d) advertising
2. A domestic trade is also known as (a) international trade (b) home trade (c) national trade (d) oversea trade
3. The form of trade that involves trade barrier is (a) foreign trade (b) domestic trade (c) home trade (d) local trade
4. A person who buys goods in large quantities from the manufacturer is called (a) retailer (b) consumer (c) wholesaler (d) producer
5. ———– is the act of buying and selling and exchange of goods and services (a) trade (b) foreign (c) market (c) transportation (d) insurance

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