To trade is to willingly give things or services and get other things or services in return. For example, a person giving a thing must find another person who wants to get that thing. The giver gets something back in return. A trade is also called an exchange or a swap.
An early type of trade is barter. Barter was the exchange of goods and services for other goods and services. Barter involves trading things without using of money. Modern traders commonly buy and sell by the use of money. Trade between two traders is called bilateral trade. Trade between more than two traders is called multilateral trade.
The things that are given from one person to the other are called goods.
Money can be given in return for a service or for a thing. If money is part of the trade, then the person who gives the money is buying, and the person who gets the money is selling.
A place where trading takes place is called a market.
When there is no money involved in the trade, the trade is called barter. If there is money involved in the trade, the trade is called a purchase. In the past people would barter to get what they wanted, instead of buying goods and services.
Economics includes the study of trade.
Trade occurs not just between people, but also between large companies and even countries. Governments sometimes take some of the money or goods involved trade between countries. This is a type of tax called a tariff. Smugglers try to trade without paying tariffs.
Free trade between two countries is when there are small or no tariffs, quotas, or other restrictions on trade.
There are two forms of trade. They are
Domestic trade is the exchange of goods within a country. Domestic trade is very important because it allows different types of goods to reach to all parts of the country. It makes the standard of living of the people of the country better. It helps an industry to grow by making sure that there are raw materials. Domestic trade may be divided into two. They are:
Wholeselling is the sale of goods to industrial, commercial, institutional or other professional businesses. They can also be sold to other wholesalers. It is the sale of goods to anyone that is not a consumer. Wholesalers usually buy and sort goods in large numbers.
Retail is the process of selling goods or services to consumers through many means of distribution to earn a profit. The term "retailer" usually means where a person sells a small amount of good to many individuals, who are consumers.
International trade is the exchange of goods and services between different countries. International trade has existed throughout history. For example Uttarapatha, Silk Road, Amber Road, scramble for Africa, Atlantic slave trade, salt roads. When there is trade between two or more countries factors like currency, government policies, economy, judicial system, laws, and markets affect trade.
International trade may be divided into three. They are:
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