TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

TN State Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 1.
What is meant by Barter system?
Answer:
Before the invention of money goods were exchanged for some other goods.

Question 2.
What is meant by Nallangadi?
Answer:
Day market was called as Nalangadi according to Saint, Poet Ilango Silapathigaram, Madurai to Kanchi.

Question 3.
What is meant by Allangadi?
Answer:
The place where the goods were sold was called ‘Angadi’ in that period. The night market was called as ‘Allangadi’.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 4.
Explain the meaning of the term “Vanigam”.
Answer:
The word ‘Vanigam’ has been widely used in sangam literature like Purananuru and Thirukkural. The Tamil-Brahmi inscriptions from Alagarmalai, Pugalur, Mangulam and Sri Lanka illustrate the fact that trade in gold, oil, plough, cloth etc.was conducted during the early age.

Question 5.
Write a short note on Maruvurapakkam and Pattinapakkam?
Answer:

  1. Big cities like Poompuhar had the Maruvurappakam’ (inland town) and ‘Pattinapakkam’(coastal Town), had market and bazaars where many merchants met one another for the purpose of selling or buying different kinds of commodities and food stuff.
  2. Port towns like Tondi, Korkai, Puhar and Muziri were always seen as busy with marts and markets with activities related to imports and exports.
  3. In such a brisk trade, people of the coastal region, engaged themselves in coastal trade and developed their intercontinental trade contacts.

Question 6.
What is the role of Sangam in trade development of ancient Tamiinadu?
Answer:

  1. Trade in Sangam period was both internal and external but it was conducted by means of barter (pandamattru) Trade was one of the major means of linking various regions in the medieval period.
  2. Sangam work refers to great traders, their caravans, security force, markets, marts and guilds of such great traders.
  3. The important articles which then hilly tribes offered to their neighbours in exchange were honey and roots and fruits while pastoral people offered cattle, milk and milk products.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 7.
What are the ports developed by Pandiya kingdom?
Answer:

  1. Trade and commerce was so common to Pandiya Dynasty.
  2. Information collected from the diaries of foreign travellers, voyagers, mariners and adventurers of the ancient world highlighted the prosperity of trade in the Pandiya country.
  3. The Hebrew and Latin literature, archaeological remains in Aden, Alexandria, Java, Sumatra and even China add support to the fact of existence of trade network in the Pandiya country.
  4. At the same time Pandiya developed some parts namely Korkai, Saliyur, Marunguar pattinam and Kumari are important ports among them for foreign trade.

Question 8.
What was focused in Arthasasthra about creation of wealth?
Answer:

  1. “Kautilya’s Arthasasthra” describeseconomy in Mauriyan time. This brought out history of marketing practised some 2000 years ago. According to Kautilya, trade in Medieval India was centralized.
  2. Since the commodities produced could not be sold in the location of production, the state designated certain places for selling the commodities.
  3. It levied duties on goods brought into the city and could be sold after payment of duty.
  4. Only certain merchants were authorized to engage in trade to sell at prices fixed by the chief controllers of State Trading.
  5. Arthasastra focussed on creation of wealth as the means to promote the well being of the people.
  6. Kautilya gave importance for the state in relation to treasury, taxation, industry, commerce, agriculture and conservation of natural resources.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 9.
What are the hindrances of business?
Answer:
(i) Hindrance of person:
Manufacturers do not know the place and face of the consumers. It is the retailer who knows the taste, preference and location of the consumers. The chain of middlemen consisting of wholesalers, agents and retailers establish the link between the producers and consumers.

(ii) Hindrance of place :
Production takes place in one centre and consumers are spread throughout the country and world. Rail, air, sea and land transports bring the products to the place of consumer.

(iii) Hindrance of time:
Consumers want products whenever they have money, time and willingness to buy. Goods are produced in anticipation of such demands. They are stored in warehouses in different regional centres so that they can be distributed at the right time to the consumers.

(iv) Hindrance of risk of deterioration in quality:
Proper packaging and modem air conditioned storage houses ensure that there is no deterioration in quality of products. Goods are protected against insects, rats, evaporation etc.

(v) Hindrance of risk of loss:
Fire, theft, floods and accidents may bring huge loss to the business. Insurance companies serve to cover the risk of such losses.

Question 10.
State the constraints in barter system.
Answer:
(i) Lack of double coincidence of Wants:
Unless two persons who have surplus have the demand for the goods possessed by each other, barter could not materialize. For instance ‘A’ is having a surplus of groundnut and ‘B’ is possessing rice in surplus. In this case A should be in need of rice possessed by B as the latter should desperately need groundnut possessed by A. If this “coincidence of wants” does not exist, Barter cannot take place.

(ii) Non-existence of common measure of value:
Barter system could not determine the value of commodities to be exchanged as they lacked commonly acceptable measures to evaluate each and every commodity. It was difficult to compare the values of all articles in the absence of an acceptable medium of exchange.

(iii) Lack of direct contact between producer and consumers:
It was not possible for buyers and sellers to meet face to face in many contexts for exchanging the commodities for commodities. This hindered the process of barter in all practical sense.

(iv) Lack of surplus stock:
Absence of surplus stock was one of the impediments in barter system. If the buyers and sellers do not have surplus then no barter was possible.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 11.
Explain the development of Commerce and Trade in North India.
Answer:

  1. India was prosperous even during the medieval period from 12th to 16th centuries despite political upheavals.
  2. Balban was the first sultan who paved the way in the dense forest and helped traders and their commercial caravans to move from one market place to others. Alauddin Khilji brought the price to a very low ebb.
  3. He encouraged import of foreign goods from Persia and subsidised the goods. Arabs were dominant players in India’s foreign trade.
  4. They never discouraged Indian traders like Tamils, Gujaratis, etc.. The Trade between the coastal ports were in the hands and Marwaris and Gujaratis.
  5. The overland trade with central and west Asia was in the hands of Multanis who were Hindus and Khurasanis who were Afghans, Iranians and so on.

Question 12.
Briefly explain the coastal trade in ancient Tamilnadu.
Answer:

  1. Big cities like Poompuhar had the ‘Maruvurappakam’ (inland town) and ‘Pattinapakkam’ (coastal Town), had market and bazaars where many merchants met one another for the purpose of selling or buying different kinds of commodities and food stuff.
  2. Port towns like Tondi, Korkai, Puhar and Muziri were always seen as busy with marts and markets with activities related to imports and exports.
  3. In such a brisk trade, people of the coastal region, engaged themselves in coastal trade and developed their intercontinental trade contacts.
  4. They were engaged in different kinds of fishing pearls, and conches and produced salts and built ships. Boats like ‘Padagu’, ‘Thimil’, ‘Thoni’, ‘Ambu’ ‘Odampunai’ etc… were used to cross rivers for domestic trade while Kalam, Marakalam, Vangam, Navai etc., were used for crossing oceans for foreign trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 13.
What do you know about the overseas trading partners of ancient Tamilnadu?
Answer:
(i) The growth of civilization witnessed the rise and fall of many dynasties, but still the course of commerce activities continued further and further, not only within a country, but also between nations of the world. However Tamil Nadu remained to be the founder of trade and commerce both within and outside as evidenced in various ancient literatures like Sangam.

(ii) Roman and Greek traders frequented the ancient Tamil country and forged trade relationship with ancient Kings of Pandiya, Chola and Chera dynasties. Cholas had a strong trading relationship with Chinese Song Dynasty. The cholas conquered the Sri Vijaya Empire of Indonesia and Malaysia to secure a sea trading route to China.

(iii) During the 16th and 18th centuries, India’s overseas trade expanded due to trading with European companies. The discovery of new all – sea routes from Europe to India via Cape of Good Hope by Vascoda Gama had far – reaching impact on the civilized world.

(iv) The arrival of Portuguese in India was followed by the advent of other Europeancommunities. India’s maritime trade was a monopolized one over Europeans and at one stage the global trade share of India was 55 per cent which is just 2 per cent in 21st century.

(v) The European merchants who came to India were not only individual merchants but also represented their respective governments. They gained a strong foothold in India’s maritime trade by virtue of their strong naval power. In course of time their commercial motives turned into territorial ambition like the East India Company which became the British Empire here.

(vi) Textiles and ship building earned name and fame in the 17th and 18th centuries. Britishers gradually abolished Princely order in the Indian territories. Thus the demand for Indian goods declined during the British rule.

(vii) Britishers put in place policies prohibiting the export of some of the popular goods like Indian textile goods, handicrafts, to Great Britain.

(viii) Between early 1600 and mid – 19th century, the British East India company led establishment and expansion of foreign trade all over Asia.

(ix) Although initial interest of the East India Company was aimed at reaping profits, their single minded focus was on establishing a trade, monopoly throughout Asia.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Choose the correct answer:

Question 1.
The place where the goods are sold is:
(a) Angadi
(b) MarketAnswer:
(c) Nalangadi
(d) Allangadi
Answer:
(a) Angadi

Question 2.
Hindrance of place is removed by:
(a) Transport
(b) Warehouse
(c) Salesman
(d) Insurance
Answer:
(a) Transport

Question 3.
Who wrote “Arthasasthra”?
(a) Kautilya
(b) Chanakiya
(c) Thiruvalluvar
(d) Elangovadigal
Answer:
(a) Kautilya

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

Question 4.
Trade and Commerce was common to ______________ Dynasty.
(a) pallava
(b) Chola
(c) Panidya
(d) Chera
Answer:
(c) Panidya

Question 5.
_________ was first sultan who paved way in the dense forest and helped traders to move from one market place to others place for their commercial caravans.
(a) Balban
(b) Vascoda Gama
(c) Akbar
(d) Alauddin Khilij
Answer:
(a) Balban

Samacheer Kalvi 11th Commerce Notes Chapter 1 Historical Background of Commerce in the Sub-Continent

→ Commerce has been in practice since time immemorial. It is part and parcel of human life, whether it is a king or a common man. It emerged as an economic activity, mainly as barter system which means exchange of goods for goods. Before invention of money barter system is possible.

→ The growth of civilisation witnessed the rise and fall of many dynasties, but still the course of commerce activities continued further and further, not only within the country but also between nations of the world. TamilNadu is one of the founder of trade and commerce both within and outside as evidenced in various ancient literatures like sangam.

→ In early days Ancient people who used the word ‘trade’ The word Vanigam and Vanipam would have had a Dravidian origin. The Vanigam has been widely used in Sangam literature like purananuru and Thirukkural Sangam work refers to great traders, their caravans, security force markets, merits and guilds of such great traders.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 1 Historical Background of Commerce in the Sub-Continent

→ Barter system cemented their relationship internally while cpins were used later for the purpose of exchange of goods in external trade.

→ Trade and commerce was so common to Pandiya Dynasty.

→ Foreigners who transacted business were known as Yavanars. Arabs who traded with Tamil Were called ‘Jonagar’ Hindrance of commerce are eliminated by trade, transport, warehouse, storage house, insurance companies, advertising, banks.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

TN State Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 1.
Define Economic Activities?
Answer:
Activities undertaken with the object of earning money are called economic activities.
eg: Retailer selling goods on his shop.

Question 2.
What do you mean by Business?
Answer:
Business refers to any human activity undertaken on a regular basis with the object to earn profit through production,
distribution, purchase and sale of goods and services.
eg: Fishing, Mining.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 3.
Define Profession?
Answer:

  1. Profession includes those activities, which require special knowledge and skill to be
  2. It includes activities regarding professionals, people who are engaged in a profession are called as professionals, eg: Doctors, lawyers, engineers.

Question 4.
What do you mean by Employment?
Answer:

  1. Employment refers to the occupation in which people work for others and get . remuneration in return in the form salary or wages.
  2. The one who is employed by others are called employees and
  3. The one who employs others is called employers.
    eg: Managers, clerks, factory workers.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 5.
What do you mean by human activities? Explain.
Answer:

TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business 1

Human activity is an activity performed by a human being to meet his / her needs and wants or may be for personal satisfaction. Human activities can be categorized into economic and non-economic activities. The chart below gives a snapshot of human activities.

Economic activities:
Activities undertaken with the object of earning money are called economic activities,
eg: (i) Production of goods by manufacturers,
(ii) Distribution of goods by wholesaler.

Non-economic activities:
Activities under-taken to satisfy social and psychological needs are called non-economic activities,
eg: (i) Cooking food for family,
(ii) Celebrating festivals.

Question 6.
Write short notes on:
(i) Business,
(ii) Profession
Answer:
(i) Business:
Business refers to any human activity undertaken on a regular basis with the object to earn profit through production, distribution, sale or purchase of goods and services.

(ii) Professions:
Professions are those occupations which involves rendering of personal services of a special arid expert nature. A profession is something which is more than a job. It is a career for someone who is competent in their respective areas. Those engaged in a profession are called professionals and they earn income by charging professional fee.
eg: Doctors, Engineers.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 7.
Explain the concept of ‘Business’.
Answer:
Business activities are connected with raising, producIng or processing of goods. Industry creates form utility to goods by bringing materials into the form which is useful for intermediate consumption
(i.e., further use of material in order industry) or final consumption by consumers.

Question 8.
Briefly state the human objectives of a business.
Answer:

  1. Human objectives refer to the objectives aimed at the well-being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training.
  2. The human objectives of business may thus include economic well-being of the employees, social and psychological satisfaction of employees and development of human resources.

Question 9.
Explain the characteristics of Business.
Answer:
The essential characteristics of business are as follows:
(i) Production or Procurement of Goods:
Goods must be produced or procured in order to satisfy human wants.

(ii) Sale, Transfer or Exchange:
There must be sale or exchange of goods or services. When a person weaves cloth for his personal consumption, it is not business because there is no transfer or sale.

(iii) Dealing in Goods and Services:
Goods produced or procured may be consumer goods like cloth, pen, brush, bag etc., or producer-goods like plant and machinery. Services refer to activities like supply of electricity, gas or water, transportation, banking, insurance etc.

(iv) Regularity of Dealings:
An isolated dealing in buying and selling does not constitute business. The transactions must be regular.

(v) Profit Motive:
An important feature of business es profit motive. Business is an economic activity by which human beings make their living.

(vi) Element of Risk:
The profit that is expected in a business is always uncertain because it depends upon a number of factors beyond the control of the businessman. For example, change in consumer preference. That is why profit is said to be reward for risk-taking. Thus any business activity includes an element of risk too.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 10.
Compare business with profession and employment.
Answer:

TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business 2

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 11.
Discuss any five objectives of business.
Answer:
(i) Economic Objectives:
Economic objectives of business refer to the objective of earning profit and also other objectives that are necessary to be pursued to achieve the profit objective, which includes creation of customers, regular innovations and best possible use of available resources.

(ii) Social Objectives:
Social objective are those objectives of business, which are desired to be achieved for the benefit of the society.

(iii) Organisational Objectives:
The organisati-onal objectives denote those objectives an organization intends to accomplish during the course of its existence in the economy like expansion and modernization, supplyof quality goods to consumers, customers’ satisfaction, etc.

(iv) Human Objectives:
Human objectives refer to the objectives aimed at the well¬being as well as fulfillment of expectations of employees as also of people who are disabled, handicapped and deprived of proper education and training.

(v) National Objectives:
Being an important part of the country, every business must have the objective of fulfilling national goals and aspirations. The goal of the country may be to provide employment opportunity to its citizen, earn revenue for its exchequer, become self-sufficient in production of goods and services, promote social justice, etc.

Question 12.
Distinguish between economic and non economic activity.
Answer:

Economic Activities

Non Economic Activities
Economic activities arc those activities which are undertaken to earn money or financial gain for livelihood, eg: fruit seller selling fruits. Non-economic activities are those activities which are undertaken for the sake of pleasure, performed out of love, sympathy, sentiments etc. eg: Mother cooks for her family.
Motive: Sole motive is to earn money or financial gain, eg: Working as a lawyer. Undertaken for satisfaction of social, psycho -logical or emotional needs, eg: Visit to a temple.
Money Measurement:All economic

activities can be valued in monetary terms, eg: Doctor charges ? 500 as consultation fee.

 Non-economic activities cannot be valued in monetary terms. These are an expression of a thought, feeling or a gesture, eg: An NGO distributes free clothes to poor children.
Relationship: Economic activities are related to creation of wealth, eg: Ram saved part of his salary to purchase a house of his own. Non-economic activities do not create wealth, eg: Money received as donation is spent on charity work.
Outcome All econqmic activities result in production, procurement, distribution and consumption of goods and services, eg: Nokia produces cell phones and sells across India through its distributors. The end result of a non-economic activity is the mental, emotional or psychological satisfaction of the person doing the activity, eg: Sona enjoys teaching orphans in an orphanage.
Durations: Economic activities are repetitive. They are done on a regular basis to earn a living, eg: Kulfi ice cream seller sells ice creams every evening. Non-economic activities may not be undertaken regularly. Usually they are done during free time, eg: Shankar visits orphanage in her free time.

Question 13.
Do you know that there are white collar, blue collar, pink collar jobs?
Answer:
Blue collar:
A blue collar worker is a working class person who performs manual labour, blue collar work may involved skilled or
unskilled manufacturing, mining, oil field construction.
eg: Managerial position.

White collar:
The white collar worker typically performs work in an office environment and may involve sitting at a computer or desk.
eg: Mechanics.

Pink collar:
A third type of worker is a service worker is called pink collar job whose labour is related to customer inter action. Entertainment sales or other service oriented work.
eg: Teachers, Doctors, Nurses.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Choose the correct answer:

Question 1.
The Primary objective of a business is:
(a) making profit
(b) not making profit
(c) special skill
(d) None of the above
Answer:
(a) making profit

Question 2.
Occupation of a Doctor is:
(a) employment
(b) business
(c) profession
(d) sole proprietor
Answer:
(c) profession

Question 3.
The following does not characterize business activity?
(a) production of goods and services
(b) presence of Risk
(c) sale or exchange of goods and services
(d) salary or wages
Answer:
(d) salary or wages

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

Question 4.
Activities undertaken out of love and affection or with social service motive are termed as:
(a) economic activities
(b) monetary activities
(c) non-economic activities
(d) financial activities
Answer:
(c) non-economic activities

Samacheer Kalvi 11th Notes Commerce Chapter 2 Objectives of Business

→ Main aim of Business is to earn profit. Commerce is considered to be part of business. Business deals with goods and services.

→ Exchange of goods and services should frequently takes place. The profit motive is an important distinguishing feature of business.

→ It is any activity concerned with earning money through production and exchange of goods and services.

→ Risk element is always present so profit is uncertain. Human Activity is an activity performed by a human being to meet his / her needs and wants or may be for personal satisfaction.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 2 Objectives of Business

→ Human activities may be two economic and non-economic activities.

→ Activities undertaken with the object of earning money are called economic activities (i.e.) production of goods by manufacturers selling by retailers.

→ Non-economic activities:
Activities undertaken to satisfy social and psychological needs are called non-economic activities (i.e.) looking good for family.

→ Celebrating festivals doing meditation economic objective of business is to earn profit. Social objective of business which are desired to be achieved for the benefit of the society.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

TN State Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 1.
What is WTO?
Answer:
The World Trade Organisation (WTO) was established on 1st January 1995. The GATT was renamed as WTO with some changes. WTO has 164 member countries as on 29th July 2016. India is one of the three founder members.

Question 2.
What do you mean by World Bank?
Answer:
International Bank for Reconstruction and Development (IBRD) International Bank for Reconstruction and Development is commonly known as World Bank. It was set up in 1944.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 3.
What is Special Drawing Rights?
Answer:
Special Drawing Rights was created by the IMF in the year 1969 as supplementary international Asset. It is described as paper gold.

Question 4.
What is SAARC?
Answer:
South Asian Association for Regional Co-operation is the regional intergovernmental organization and geo-political union of nations in South Asia. The member countries include Afghanistan, Bangladesh, Bhutan, India, Nepal, Srilanka, Pakistan and Maldives. It was established on 8th December 1985. It was founded at Dhaka in Bangladesh.

Question 5.
What is GATT?
Answer:

  1. GATT is one of the mechanism for regulating controlling trade relation across the countries around the world.
  2. GATT was signed Geneva on 30th October 1947 by23 countries. It came into effect on 1 January 1948. It had rules and regulation for conducting international trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 6.
What is the primary motive of establishment of WTO?
Answer:

  1. The World Trade Organisation (WTO) was established on 1st January 1955. The GATT was renamed as WTO with some changes. WTO has 164 member countries as on 29th July 2016.
  2. India is one of the three founder members.
  3. It is empowered to take decisions on all vital matters under the multilateral trade agreements.
  4. The day to day work of WTO has been entrusted to the central council. WTO is located at Geneva [Switzerland].

Question 7.
Name the affiliate of World Bank.
Answer:

  1. International Development Association (IDA).
  2. International Financial Corporation (IFC).
  3. Multinational Investment Guarantee Agency (MIGA).
  4. International Centre for Settlement of Investment Disputes (ICSID).

Question 8.
What are the criticisms of World Bapk?
Answer:

  1. Free trade benefits developed countries more than developing countries.
  2. Neglect Environmental consideration most favoured nation principles.
  3. Neglect of cultural and social factors.
  4. Failure to reduce tariffs on agriculture inability of people in developing countries to buy life saving drugs.
  5. Neglect of farmers interest in developing countries.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 9.
How is the value of SDR determined currently?
Answer:

  1. SDR was created by the IMF in the year 1969 as supplementary international reserve asset.
  2. It is described as paper gold.
  3. Initially the value of SDR was fixed to be 0.888671 grams of fine gold equivalent to one US dollar till the year 1973.
  4. After the collapse of Britten Wood system in 1973 SDR was redefined as basket of currencies.
  5. From 1st October 2016 SDR basket consists of US dollar, Euro, the Chinese Renminbi, Japanese Yen and British Pound sterling.
  6. The value of SDR is regularly posted daily in IMF website.
  7. It is calculated as the sum of specific amount of each basket currency value is US dollar based On the spot exchange rates observed at noon London time.
  8. IMF allocates SDR to member countries in proportion to their quota. IMF member can exchange SDR for freely usable currencies by voluntary exchange or as per IMF instructions.
  9. Besides members can borrow from IMF at favourable rate of interest to correct imbalance in balance of payments.

Question 10.
Mention the functions of SAARC.
Answer:
Functions of SAARC are highlighted.

  1. Monitoring and co-ordinating the development programme.
  2. Determining inter-sectoral priorities.
  3. Mobilizing cooperation within and outside the region.
  4. Dealing with modalities of financing.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 11.
Point out the objectives of WTO.
Answer:

  1. Improving the standard of living of people in member countries.
  2. Making optimum utilization of world’s resources for sustainable development of member countries.
  3. Promoting an integrated more viable and durable trading system in the sphere of international business.
  4. Expansion of trade in goods and services.
  5. Ensuring full employment and large steady growth volume of real income and effective demand.
  6. Protecting the environment.

Question 12.
Write down the functions of WTO.
Answer:
WTO performs the following functions:

  1. It is a forum for negotiation and formalization of trade agreement among the member countries.
  2. It settles disputes and grievances relating to trade among the member countries.
  3. It frames commonly acceptable code of conduct in order to reduce trade barriers.
  4. It holds consultations with IMF and World Bank (IBRD) and its affiliates to bring about a greater understanding and co-operation in global economic policy making.
  5. It supervises the operations of agreement relating to General Agreement on Tariffs and Trade (GATT) and Trade-Related Intellectual Properties Rights (TRIPS).
  6. It regulates trade between participating countries.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 13.
Describe the benefits of WTO.
Answer:
(i) WTO is promoting international peace and creating .a conductive environment for conducting international trade.

(ii) It settles the trade disputes amicably among the member countries.

(iii) It promotes the standard of living of people by increasing their income level from free trades.

(iv) WTO has removed quantitative restrictions and non-tariff barriers. It has facilitated free flow of foreign trade among the member countries. The countries can impose import restrictions only to correct balance of payments difficulties and not otherwise.

(v) It stimulates economic growth of developing countries by providing them with much needed capital and giving them preferential treatment in trade related matters.

(vi) WTO organizes periodical regional and international conference. Thus developing countries get opportunity to learn the technicalities, rules and regulations governing world trade, technical assistance available globally, trade potentials in member countries and so on.

(vii) WTO gives people across the world a wider choice of goods and broader range of qualities of goods to choose from by promoting free trade among the member countries.

(viii) WTO has lowered trade barriers and thereby allowed trade to flourish across the world. The increase in trade contributes to increase in national income and personal income of people.

(ix) WTO provides a platform for member countries to establish trade links with one another. In the absence of WTO member countries may have to enter many multilateral agreement with so many countries across the world. It provides a greater access to all natiohs under one roof.

(x) WTO is committed to protecting free trade. It has framed rules on subsidies and dumping.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 14.
Highlights the functions of IBRD.
Answer:

  1. Assisting reconstruction of war-affected countries.
  2. Promoting economic growth and balanced growth of international business.
  3. Promoting infrastructural facilities like energy and transportation, road development, etc. in member countries.
  4. Encouraging agricultural and industrial development in developing countries by providing adequate resources.
  5. Providing resources for promoting sanitation, education, health care and small scale enterprises in member countries.
  6. Improving standard of living of people of member countries by providing assistance by removing poverty, raising productivity, providing technical support and conducting research and development.

Question 15.
Write down the functions of IMF.
Answer:

  1. It acts as short term credit institution at the international level.
  2. It provides machinery for ordinary adjustments of exchange rates.
  3. It has a reservoir of currencies of the member countries from which a borrower can borrow currencies of other nations.
  4. It promotes economic stability and global growth by encouraging countries adopt sound economic and financial policies.
  5. It offers technical assistance and .training . to help member countries strengthen and implement effective policies. Technical assistance, is offered in formulating banking, fiscal, monetary and exchange policies.
  6. It helps member countries correct their imbalance in balance of payment.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 16.
Explain how far India has benefited from IMF.
Answer:
Free Convertibility of Indian Rupee:
Indian rupee has become independent after the establishment of IMF. Earlier it was linked with pound sterling. Its value is now determined in terms of Gold. Hence it is freely convertible.

(i) Loan For Development Activities:
India got several loan facilities from IMF for its several development projects.

(ii) Ability To Purchase Foreign Currency:
Government of India is able to purchase foreign currencies from time to time to meet the ever growing requirement of development activities.

(iii) Expert Advice:
India used to get expert advice from IMF for solving the economic problems. It has given valuable advice to India with regard to financing its 5 year plan.

(iv) Timely Help:
India has received timely help from IMF many a time to eliminate the deficit in its balance of payments. India got help from IMF during 1966 in the aftermath of war with Pakistan. It received assistance from IMF for combating oil shock. Between 1980 and 1983 India got assistance from IMF to manage global economic recession.

(v) Financial Assistance during Natural Calamity:
India has got a lot of financial assistance from IMF to solve the economic crises arising from natural calamities like, floods, famine, earthquake, aggressions of Chinese and Pakistan etc. It gets technical assistance from IMF.

(vi) Membership in World Bank:
By virtue of its membership in IMF India could become member in the World Bank.

(vii) Help During 1991 Economic Crisis:
During1990, India faced serious economic crisis. Indian Government was almost nearing bankruptcy. It got assistance from IMF by pledging its gold reserve with it’to solve its balance of payments crisis.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 17.
A vital role played in international business by WTO.
Answer:
World Trade Organisation (WTO) is the only global international organisation dealing with the rules of trade between nations.

Question 18.
Necessity for world as global village through IMF, IBRD and SAARC.
Answer:

  • It acts as short term credit institution at the intemationallevel.
  • Promoting the welfare of people of Asia.

Question 19.
WTO- new agreements.
Answer:
Its main aim is to ensure smooth flow of goods trade. World organisation was established on 1st January 1993. The GATT was renamed as WTO with some changes WTO has 164 member countries as on 29th July 2016.

Question 20.
IMF World Bank and SAARC major role in international business.
Answer:

  1. Monitoring and co-ordinating the development programme.
  2. Dealing with modelities of financing.
  3. World Bank: Providing long term loans to developing countries.
  4. IMF: It works for faster global growth.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Choose the Correct Answer:

Question 1.
General Agreement on Tariff and Trade was signed on:
(a) 30-October-1947
(b) 29-October-1947
(c) 28-October-1947
(d) 26-October-1947
Answer:
(a) 30-October-1947

Question 2.
WTO was established on:
(a) 1-1-1996
(b) 1-1-1997
(c) 1-1-1995
(d) 1-1-1994
Answer:
(c) 1-1-1995

Question 3.
The headquarter of WTO is located at:
(a) New York
(b) London
(c) Geneva
(d) Brazil
Answer:
(c) Geneva

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Question 4.
The day to day administration of WTO is entrusted with:
(a) Executive Council
(b) General Council
(c) Administrative Council
(d) General Body
Answer:
(b) General Council

Question 5.
World bank is located at:
(a) Washington DC
(b) New York
(c) Tokyo
(d) HongKong
Answer:
(a) Washington DC

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 27 Facilitators of International Business

Samacheer Kalvi 11th Commerce Notes Chapter 27 Facilitators of International Business

→ World trade organisation: International business involved complex issues among various countries way back 1950’s. A keen need then was felt to establish separate ipechanism for regulating and controlling trade relation across the countries around the world.

→ As a result, the general agreement on tariffs and trade. [GATT] was signed at Geneva on 30th October 1947 by 23 countries. It came into effect on 1st January 1948. GATT was a multilateral treaty. It laid down rules and regulations for conducting international trade.

→ GATT achieved many success but various countries felt the need to create a new international body to replace the GATT. The GATT which remained in force from 1948 to 1994. Thus came to an end with the establishment of world trade organisation [WTO] on 1st January 1995.

→ The day to day work of WTO has been entrusted to the general council. WTO is located at Geneva [Switzerland].

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 25 International Business

TN State Board 11th Commerce Important Questions Chapter 25 International Business

Question 1.
What do you mean by international business?
Answer:

  1. International business denotes all those business activities which take place beyond the geographical limits of the country.
  2. It involves not only the international movements of goods and services, but also of capital personnel, technology and intellectual property like patents, trademarks, know-how and copy rights.

Question 2.
What is meant by Export Trade?
Answer:

  1. When the firm of country sells goods and services to a firm of another country it is called export trade.
  2. Export trade indicates selling of goods and services from the home country to a foreign country, eg: the sale of handicraft, leather products, electronic goods, herbal products, etc., by Indian company to other countries is known as export trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 3.
What is meant by Import Trade?
Answer:

  1. When the business firm of a country purchases goods -from the firm of another country it is called import trade.
  2. Importing means purchase of foreign products and bringing them into one’s home country,
    eg: When Indian enterprise purchases petroleum products, electrical goods, machinery, and medical equipments etc., from other countries, it is termed as Import Trade.

Question 4.
What is meant by Entrepot Trade?
Answer:
When the firm of country imports goods for . the purpose of exporting the same goods io the firms of some other country with or without making any change in the goods meant for export it is known as entrepot trade.

Question 5.
Give any two reasons for International Business.
Answer:

  • Unequal distribution of natural resources.
  • Uneven availability of factors ofproduction.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 6.
Describe importance of the external trade to an economy.
Answer:

  1. Due to advancement of technology the national economics are increasingly becoming borderless and getting progressively integrated into the world economy. The contemporary world is called as “global village”.
  2. Business in today’s context is not restricted to the mere boundaries of the country but alsso expands to boundaries of the several other countries.
  3. Due to tremendous development in the information and communication technology (ICT) and rapid advancement in transportational system more and more firms engage in international business which presents them with numerous opportunities for their faster economic growth and increased gains.

Question 7.
What is the necessity for entrepot trade?
Answer:
A country cannot import goods directly from the others because of the following reasons.

  1. The country may not have any accessible trade routes connecting the importing country.
  2. The goods imported may require further processing or finishing before exporting, and these facilities may be lacking in the exporting or importing country.
  3. There may not have any bilateral trade agreement between both the country.
  4. Importer and exporter may not share good economic relation with each other.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 8.
What are the limitations of .international business?
Answer:
(i) Economic Dependence:
International trade is more likely to make the country too much dependent on imports from foreign countries. The former may not take any efforts to produce goods and services indigenously’to substitute imported goods and thus becoming self sufficient. As a result the importing country may become economically slave to exporting country and end up becoming colony of the exporting country.

(ii) Inhibition of Growth of Home Industries:
International business may discourage the growth of indigenous industry.

(iii) Import of Harmful Goods:
International business may lead to import of luxurious goods, spurious goods, dangerous goods, etc. It may harm the well-being of people.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 9.
List out the advantages of international trade.
Answer:
(i) Geogaraphical Specialization:
Countries across the world differ significantly in terms of natural resources, capital equipment, manpower, technology and land and so on.

(ii) Optiniurn use of Natural Resowces:
International business operates on a simple principle that a country which can produce more efficiently and trade the surplus production with other countries has to procure what it cannot produce more efficiently.

(iii) Economic Development:
International business helps the developing countries greatly in achieving rapid economic development by importing machinery, equipment, technology, talent, and so on.

(iv) General ion of Employment:
International business generates employment opportunities by assisting the expansion and growth of agricultural and industrial activities. It provides direct employment to those people who are hired by export and import firms and generates indirect employment to number of intermediary firms like, clearing and forwarding agent, indent houses transport organizations, outsourcing agencies, etc.

(v) Higher Standard of Living:
On account of international business, the citizens of the country can buy more varieties of goods and services which cannot be produced cost effectively within the home country.

(vi) Price Equilisation:
International business helps to stabilize the prices of various commodities which are fluctuating on a daily basis in the world market. Whenever the price of a commodity rises sharply in a particular country, the same commodity is imported from some other foreign countries to prevent the sharp rise in prices in the home country.

(vii) Prospects for Higher Profit:
International business helps the firms which produce goods in excess to sell them at relatively higher price to various countries in the international market. This enables them to earn higher profit.

(viii) Capacity Utilisation:
International business enables the firms across the country to sell their goods and services on a large scale in the international market.

(ix) International Peace:
International business makes countries across the world become inter-dependent while these countries are independent in their functioning.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 10.
Enumerate the disadvantages of international trade.
Answer:
(i) Economic Dependence:
International trade is more likely to make the country too much dependent on imports from foreign countries. The former may not take any efforts to produce goods and services indigenously to substitute imported goods and thus becoming self sufficient.

(ii) Inhibition of Growth of Home Industries:
International business may discourage the growth of indigenous industry. Unrestricted imports and severe competition from foreign companies may ruin the home industries altogether.

(iii) Import of Harmful Goods:
International business may lead to import of luxurious goods, spurious goods, dangerous goods, etc. It may harm the well-being of people.

(iv) Shortage of Essential Goods in Home Country:
Moreover the export of essential commodities out of the greed of earning more foreign exchange may result in absolute shortage of these goods at home country and people may have to buy these commodities at exorbitant price in the local market.

(v) Misuse of Natural Resources:
Excessive export of scarce natural resources to various countries across the world may lead to faster depletion of the resources in the exporting countries.

(vi) Political Exploitation:
International business may create economic dependence among the countries which may threaten their political independence.

Question 11.
Distinguish between Internal and International trade.
Answer:

TN Board 11th Commerce Important Questions Chapter 25 International Business 1

(iii) Legal Obligations:
Foreign trade is to be conducted strictly in accordance with the export and import policy of the country concerned. The consent of the government is to be mandatorily obtained with reference to export and import of certain goods and services. Thus government intervention is direct in respect of international transactions.

(iv) Exposure to Risk:
International business imposes huge risks on the parties thereto due to long distances, fluctuation of value of currency, obsolescence, sanctioned, war, etc.;

(v) Heavy Documentation Work:
International business necessitates fulfillment of a lot of formalities. Parties to international business have to execute a number of documents in the matters of conducting International business.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Question 12.
Scope of international business.
Answer:
Involvement of countries. International business can take place only when transactions occur across different countries

Question 13.
Wide range of international business.
Answer:
Geographical specialisation optimum use of Natural resources, Economic development.

Question 14.
Take interest in export or import trade Try to become exporter.
Answer:
In export – take interest in exporting all types of dress materials. Like Sarees, Chudithars.
First I select Importer: To follow export trade procedure.

  1. Receiving enquiries.
  2. Receipt of order or indent.
  3. Obtaining letter of credit.
  4. Obtaining export license.
  5. Obtaining shipping order.
  6. Packing, marking and forwarding.
  7. Preparation of Invoice.
  8. Obtaining customs clearance.
  9. Paying dock dues.
  10. Verification of goods to be shipped.
  11. Bill of lading.
  12. Certificate of origin.
  13. Receiving payments.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Choose the Correct Answer:

Question 1.
Movement of goods, services, intellectual property, human assets, technology and so on among the countries:
(a) international Trade
(b) international business
(c) entrepot Trade
(d) internal trade
Answer:
(a) international Trade

Question 2.
Goods are imported for purpose of re-export to another country is termed as:
(a) import trade
(b) export trade
(c) entrepot trade
(d) international trade
Answer:
(c) entrepot trade

Question 3.
Movement of goods, services among the countries:
(a) international trade
(b) international business
(c) entrepot trade
(d) internal trade
Answer:
(b) international business

Question 4.
Selling of goods from home country to foreign country is called:
(a) home trade
(b) entrepot trade
(c) foreign trade
(d) joint venture
Answer:
(c) foreign trade

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 25 International Business

Samacheer Kalvi 11th Commerce Notes Chapter 25 International Business

→ This chapter presents the basic aspects of international business. It enlightens the students on the difference between internal trade and international business. Types of international business. The advantages and dis advantages of international business. The various pieces of literature bear enormous evidence about India’s foreign trade with other countries.

→ Evidences about our international trade are found in the ancient literature of our country particularly in our Sangam literature. There were regular Trade routes across the seas to the distant Jawa and Sumatra Islands in the east and up to the Arabian Peninsula in the west.

→ But the volume of such trade was insignificant and continued to remain so small all through the middle ages and right Up to the advent of the British rule in India. It is only after the establishment of the British rule in India that India’s foreign trade took a definite shape.

→ International trade has become a part and parcel of the normal economic life of any country. International business denotes all those business activities which take place beyond the geographical limits of the country.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

TN State Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 1.
What do you mean by Balance of payments?
Answer:
Balance of payment refers to a systematic record of all economic transactions between the residents of one country and the residents of foreign countries during a particular period of time. For example, one year.

Question 2.
What do you mean by Balance of trade?
Answer:
Balance of trade denotes the difference between the value of import and the value of export during a year. If the export of a country exceeds its imports, it shows favourable balance of trade. If-the import exceeds the exports, it shows unfavorable balance of trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 3.
Define Balance of payments.
Answer:
According to International Monetary Fund,
“ The balance of payments for given period is a systematic records of all economic transactions taken place during the period between residents of the reporting countries.”

Question 4.
What is the composition of private capital?
Answer:
Private capital consists of foreign invest- mems, long term loan and foreign currency deposits.

Question 5.
Mention the components of banking capital.
Answer:
Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 6.
Mention the components of official capital.
Answer:
It includes RBI’s holdings of foreign currency and special drawing rights (SDR) held by the Government.

Question 7.
Why is Balance of payment prepared?
Answer:

  1. Balance of payment is the principal tool for analyzing the monetary position of international trade of a country just like Receipts and Payments account of enterprise revealing the net effect of cash movements happening in an enterprise during a particular period.
  2. Balance of payments help in framing monetary, fiscal and trade policies of country. Government keenly observes balance of payment position of its important trade partners in making policy decisions. It reveals whether a country produces enough economic output to pay for its growth. It is reported either for every quarter or for a year.

Question 8.
What does Balance of payment disclose?
Answer:

  1. A balance of payment surplus indicates that country’s exports are more than its imports and its government and residents are savers.
  2. A balance of payments deficit indicates to the fact that country’s import is more than the export. At the same time the country borrow finance from other countries to pay for its imports.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 9.
What are the credit items shown in currents accounts?
Answer:

  1. Goods export (visible).
  2. Invisible exports.
  3. Transport service sold abroad.
  4. Banking service sold abroad.
  5. Insurance service sold abroad.
  6. Income received on loan and investment made in foreign countries
  7. Expenses incurred by foreign tourists in India.

Question 10.
State the components of capital account.
Answer:
Capital account consists of three components.

  1. Private Capital,
  2. Banking Capital and
  3. Official Capital.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 11.
Write down the structure of capital account.
Answer:

TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments 1

Capital account consists of three components.
(i) Private Capital.
(ii) Banking Capital.
(iii) Official Capital.

(i) Private Capital:
Private capital consists of foreign investments, long term loan and foreign currency deposits.

(ii) Banking Capital:
Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

(iii) Official Capital:
It includes RBI’s holdings of foreign currency and special drawing rights (SDR) held by the Government.

Question 12.
Distinguish balance of payment and balance of trade.
Answer:

TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments 2

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 13.
Highlight the features of balance of trade.
Answer:

Nature

 Balance of Trade
Meaning Balance of trade is statement showing the net effect of export and import of a country.
Nature of Transactions recorded It records only transactions relating to merchandise, i.e. goods transactions.
Capital Transactions It does not record capital transactions.
Structure It is part of current account of BOP.
Net Position It may be at favourable or unfavourable or in equilibrium state.
Indicator Economic Status It is not true indicator of economic prosperity or economic relations of country.
Correcting unfavourableness Unfavourable balance of trade can be converted into favourable balance of payment.

Question 14.
Impact of Balance of Payments and Trade.
Answer:
BOP shows a favourable or surplus position when the total receipts from foreign countries exceed the total payments to foreign countries are less than the payments to foreign countries. BOP is said to be unfavourable or indeficit.

BOP position shows the economic health of nation just like the thermometer indicates the temperature of human body. Favourable BOP indicates economic prosperity while unfavourable balance of payments shows economic weakness of a country.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 15.
Necessary for Global Village concept.
Answer:
(i) The current account.
(ii) The financial account.
(iii) The capital account.
Together included in the overall balance of payments.
It includes total inflows and outflows for a given nation.
The current account states that the balance of trade means the purchase and sale of goods and services.

Question 16.
Balance of Payment is key to economic development.
Answer:
Balance of payments help in framing monetary, fiscal and trade policies of country government keenly observes balance of payment position of its important trade – partners in its making policy decisions. It reveals whether a country produces enough economic output to pay for its growth.

Question 17.
Importance of BOP and BOT.
Answer:
BOP:
Balance of payment refers to a systematic record of all economic transactions
between the residents of one country and the residents of foreign countries during a particular period of time, eg: One year it contains a classified record of all receipts and payments arising from goods exported.

BOT:
Balance of trade denotes the different between the value of import and the value of export during a year. If the export of a country exceeds its imports, It shows favourable balance of trade. If the import exceeds the exports, it shows unfavourable balance of trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Choose the Correct Answer:

Question 1.
The Statement which discloses a record of transactions between the residents of one country and residents of foreign country:
(a) balance of payment
(b) balance of trade
(c) statement of receipts apd payments
(d) accounting statement
Answer:
(a) balance of payment

Question 2.
The Balance of Payments councils consists of:
(a) current account
(b) capital account
(c) receipts and payments account
(d) both current account and capital account
Answer:
(d) both current account and capital account

Question 3.
Foreign capital long- term loan and foreign currency reserve are recorded under:
(a) official capital
(b) private capital
(c) banking capital
(d) both private and official Capital
Answer:
(b) private capital

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Question 4.
The term official capital includes:
(a) RBI holdings of foreign currencies
(b) Special Drawing Rights held by the Government
(c) Both A and B
(d) Foreign Investment
Answer:
(c) Both A and B

Question 5.
Balance of payments surplus indicates:
(a) Exports are more than the Imports
(b) Imports are more than Exports
(c) Exports and Imports are at Equilibrium
(d) Exports and Imports are above Equilibrium
Answer:
(a) Exports are more than the Imports

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 28 Balance of Trade and Balance of Payments

Samacheer Kalvi 11th Commerce Notes Chapter 28 Balance of Trade and Balance of Payments

→ Balance of trade and balance of payment are important aspects in international trade.

→ Balance of payment (BOP): Balance of payment refers to a systematic record of all economic transaction between the residents of one country and the residents of foreign countries during a particular period of time for example one year.

→ It contains a classified record of all receipts and payments arising from goods exported services rendered and capital received by residents in a country and payment made by them on accounts of goods imported, services rendered and capital transferred to non residents or foreigners out of the country.

→ According to international monetary fund. The balance of payment for given period is a systematic record of all economic transaction taken place during the period between residents of the reporting countries.

→ Structure of balance of trade, balance of services, balance of unilateral transfer and balance of capital transaction. Balance of payment it is true indicator of economic performance of an economic.

→ The balance of payments consists of two components. Namely current account and capital account.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

TN State Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 1.
Who is a middlemen?
Answer:
Hie term ‘Middlemen’ refers to all those who are in the link between the primary producer and the ultimate consumer in the exchange of goods or service.

Question 2.
Define Wholesaler.
Answer:
According to evelyn Thomas “a true wholesaler is himself neither a manufacturer nor to retailer but act as a link between the two”.
[OR]
According to cundiff and still “Wholesaler buys from the producer and sell merchandise to the retailers and other merchants and not to the consumer”.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 3.
Define Retailer.
Answer:
According to Evelyn Thomas. “The retailer is the last of the many links in the economic chain where by the consumer’s wants are satisfied smoothly and efficiently by retailers”.
[°R]
According to cundiff and still “A retailer is a merchant or occasionally an agent whose main business is selling directly to the ultimate consumers”.

Question 4.
Who is a broker?
Answer:
A Broker is one who bargains for another and receives commission for his service. He is paid ‘brokerage’ for his services. He brings buyer and the seller to the negotiating process and arranges for finalising contracts between them.

Question 5.
What are the classifications of the merchant middlemen?
Answer:
The merchant middlemen can be sub-divided into

  1. Wholesaler,
  2. Retailer.

The mercantile agents are:

  1. Brokers,
  2. Factors,
  3. Commission Agents,
  4. Del-credere Agents,
  5. Auctioneers,
  6. Warehouse keepers.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 6.
Who are the mercantile agents?
Answer:
Mercantile Agents are also called functional middlemen. A businessman appoints a person to buy and sell goods on his behalf and gives him the right to borrow money on the security of goods.

Question 7.
What do you understand by channels of distribution?
Answer:
A channel is the route through which the goods are passed on to the ultimate consumer. There are direct channels or routes of distribution without middlemen. Indirect channel consists of one or more middlemen performing different functions. Middlemen help in the flow of goods towards the lakhs or crores of consumers.

Question 8.
Who is a factor?
Answer:
A factor is a mercantile agent to whom goods are entrusted for sale by a principal. He takes physical possession of the goods, though he does not obtain ownership of the goods.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 9.
Explain the types of mercantile agents.
Answer:
(i) Brokers,
(ii) Factors,
(iii) Auctioneers,
(iv) Commission Agents,
(v) Warehouse keepers.
(vi) Del-credere Agents.

(i) Brokers:
A Broker is one who bargains for another and receives commission for his service. He is paid ‘brokerage’ for his services.

(ii) Factors:
A factor is a mercantile agent to whom goods are entrusted for sale by a principal.

(iii) Commission Agent or Consignees:
A commission agent buys and sells goods on behalf of the principal for a fixed rate of commission for all his transactions.

Question 10.
Explain any three characteristics of wholesalers.
Answer:
The following are file characteristics of wholesalers:

  1. Wholesalers buy goods directly from producers or manufacturers.
  2. Wholesalers buy goods in large quantities and sell in relatively smaller quantities.
  3. Wholesalers’ sell different varieties of a particular variety of product.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 11.
What are the services .rendered by the wholesalers to the manufacturers?
Answer:
Services to Producers or Manufacturers:

  1. Economies in Large Scale.
  2. Assistance in Distribution.
  3. Warehousing Facility.
  4. Forecasting of Demand.
  5. Publicity of Goods

Question 12.
What are the characteristics of retailers?
Answer:

  1. Retailer generally involves dealing in a variety of items. A retailer makes purchases from producers or wholesalers in bulk for sale to the end consumers in small quantities.
  2. Retail trade is normally carried on in or near the main market area.
  3. Generally, retailers involve buying on credit from wholesalers and selling for cash to consumers.
  4. A retailer has indirect relation with the manufacturer (through wholesalers) but a direct link with the consumers.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 13.
What are the functions of Wholesalers?
Answer:
(i) Collection of Goods:
Wholesaler collects the goods from manufacturers or producers in bulk.

(ii) Storage of Goods:
Wholesaler collects and stores them safely in warehouses, till they are sold out. Perishable goods like fruits, vegetables, etc. are stored in cold storage facility.

(iii) Distribution:
Wholesaler sells goods to different retailers. Thus he performs the function of distribution.

(iv) Financing:
Wholesalers provide financial support to producers and manufacturers by providing money in advance to them. He also sells goods to retailer on credit. Thus, at both ends wholesaler acts as a financier.

(v) Risk Taking:
Wholesaler buys finished goods from the producer and keeps them in the warehouses till the time they are sold and assumes the risk arising from price, spoilage of goods, and changes in demand.

Question 14.
What are functions of Retailers?
Answer:
Functions of Retailers:
(i) Buying:
A retailer buys a wide variety of goods from different wholesalers after estimating customer’s demand.

(ii) Storage:
A retailer maintains a ready stock of goods and displays them in the shop.

(iii) Selling:
The retailer sells the goods in small quantities according to the -demand taste and preference of consumers.

(iv) Grading and Packing:
The retailer grades the goods which are not graded by manufacturers and wholesalers.

(v) Risk-bearing:
A retailer always keeps stock of goods in anticipation of demand and bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc.

(vi) Transportation:
Retailers often carry goods from manufacturers to their retail outlets.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 15.
Explain the services rendered by wholesalers to retailers.
Answer:
(i) Financial Assistance:
Wholesalers provide financial assistance to retailers by selling goods on credit. This is done by allowing credit to retailers purchasing goods from them and makes payment to them after receiving money from their customers. This helps retailers to manage their business with small amount of working capital.

(ii) Meeting the Requirements:
Due to limited capital and lack of space in his facility a retailer cannot hold large variety of products.

(iii) Introduction of New Products :
Wholesalers bring new products and their uses to the notice of retailers.

(iv) Price Stability:
Wholesalers reduce price fluctuations by adjusting supply and demand and save the retailers from loss arising from price fluctuations.

(v) Economy in Transport:
A wholesaler often delivers goods at the door steps of retailers and save their time and cost of transport.

(vi) Regular Supply:
Wholesalers keep large stock of varieties of goods and provide a regular supply of goods as per the retailer’s need.

Question 16.
What are the service’s rendered by retailers to wholesalers?
Answer:
(i) Help in Distribution:
Retailers relieve the manufacturers and wholesalers of the burden of collecting and executing a large number of small orders from various consumers.

(ii) Market- Information:
Retailer supply valuable information to wholesalers about changes in tastes, preferences, fashion etc. of consumers.

(iii) Large Scale Operation:
The manufacturers and wholesalers are freed from the trouble of making individual sales to consumers in small quantities. This enables them to operate on, at relatively large scale and thereby fully concentrate on their other activities.

(iv) Help in Promotion:
Retailers participate in the promotional activities carried by , manufacturers and wholesalers such as short time offers, coupons, free gifts, sales contests, etc. Retailers help in promoting the sale of the products.

(v) Personal Attention:
The retailer is able to provide more personal attention to his customers than the wholesaler is, He gives special services on the spot when the articles require minor repairs.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 17.
Explain the services rendered to consumers by Retailers.
Answer:
A retailer provides the following services to consumers.
(i) Regular Supply of Goods:
Retailers maintain a ready stock of various products of different manufacturers for sale to consumers.

(ii) New Products Information:
The retailers provide important information about the new arrival of products through their personal.

(iii) Credit Facilities:
Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption.

(iv) Wide Selection:
Retailers generally keep stock of a variety of products of different manufacturers.

(v) Miscellaneous Services:
(a) Retailers provide free door delivery services to the customers,
(b) They provide after sale service to customers,
(c) They allow cash discounts on their sales.

Question 18.
What are the factors affecting a channel of distribution?
Answer:
The factors determining the suitability of a channel for a product distribution are as follows:
(i) Product Characteristics:
Seasonal products are distributed through less layer of middlemen. Non standardized products that are made according to customer specifications may be delivered directly.

(ii) Market Characteristics:
The size of the market for the goods is a major factor while selecting the route for distribution of products.

(iii) Number of Consumers:
Large purchases made by few consumers require centralised distribution.

(iv) Middlemen factor:
Middlemen who are experienced and have produced more sales are wanted by all producers. Long channel naturally increases the cost and price of the product.

(v) Capacity of the Manufacturer:
A financially strong producer may select a high technology oriented channel which will reduce cost in the long run. Manufacturers with large volume of production may open direct branches in cities and towns where there is more sales. They can also provide more services expected by consumers.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Question 19.
Student should visit a nearby wholesale trade unit and watch the trading activities held there.
Answer:
Rathna Fan House – T. Nagar. All kinds of fans are available here.

Question 20.
Student should visit a nearby two-wheeler showroom and watch which type of channel of distribution followed by them.
Answer:
Manufacturer – middlemen – showroom – customers.

Question 21.
Student should know that there will be SOHO (small Office – Home Office) method that plays an important role.
Answer:

  • Small office: For. business purpose to open separate office to use business purpose.
  • Home office: For business purpose our home is used as a business office purpose.

Question 22.
Students should recognize the importance of on-Ijne trading and develop them as per the future developments in this field.
Answer:

  1. Importance of on-line trading and develop on-line trading.
  2. Fast growth of increasing the population no time to spend for shopping.
  3. So people to sit at home. to order the products which is necessary for their home. So on-line trading is essential for fast growth of population.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 23 Channels of Distribution

Choose the Correct Answer:

Question 1.
Trade middleman who acts as a link between wholesaler and customers refers to a:
(a) producer
(b) broker
(c) retailer
(d) customer
Answer:
(c) retailer

Question 2.
Who is the first middleman in the channel of distribution?
(a) Wholesaler
(b) Producer
(c) Retailer
(d) Customer
Answer:
(a) Wholesaler

Question 3.
________ buy the goods from the producer and sell it to the retailers.
(a) Manufacturer
(b) Wholesaler
(c) Retailer
(d) consumers
Answer:
(b) Wholesaler

Question 4.
________ are buyer and the seller into contact.
(a) Broker
(b) Commission agent
(c) Selling agent
(d) stockiest
Answer:
(a) Broker

Question 5.
Merchant middlemen can be classified into ______ categories.
(a) three
(b) two
(c) five
(d) four
Answer:
(b) two

Question 6.
Wholesalers deal in ________ quantity of goods.
(a) small
(b) large
(c) medium
(d) limited
Answer:
(b) large

Question 7.
A ______ is a mercantile agent to whom goods are entrusted for sale by a principal and takes physical possession of the goods, but does not obtain ownership.
(a) broker
(b) factor
(c) warehouse-keeper
(d) commission agent
Answer:
(b) factor

Samacheer Kalvi 11th Commerce Notes Chapter 23 Channels of Distribution

→ The manufacture producing goods on large scale select the channel through which their goods should reach the consumers. These goods are converted into cash only when the end user buy and use them. To cut the cost, to reach maximum customers and to retain all consumers and producers select one channel or combine many channels to distribute the goods.

→ Channel of distribution:
A channel is the route through which the goods are passed on to the ultimate consumer. There are direct channels or routes of distribution without middle men. Middle men help in the flow of goods towards the lakhs or crores of consumers. The products should reach all these consumers living inside the country and throughout the world.

There are industrial and consumer goods, perishable and durable goods, pin to plane different size of goods and so on. Not only the goods but also the services need distribution network.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 26 Export and Import

TN State Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 1.
What is meant by indent?
Answer:

  1. An indent is an order placed by an importer with an exporter for the supply of certain goods.
  2. It contains full details regarding goods to be imported the terms and conditions regarding price, shipment, delivery, the method of payment etc.

Question 2.
Write any two export promotion institutions.
Answer:

  • Department of Commerce.
  • Export Promotion Council (EPC).

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 3.
Mention the types of Indent.
Answer:
There are three types of indent, namely

  • Open indent,
  • Closed indent and
  • Confirmatory indent.

Question 4.
What is the Letter of credit?
Answer:
Letter of Credit is opened only for well- established and reputed importer. It is beneficial both to the exporter and importer. Exporter is assured of payment and need not bother about credit worthiness of importer. The letter of credit simply transfers the burden of settling the transactions to the bank.

Question 5.
What are the contents of Indents?
Answer:

  1. Quantity of goods sent,
  2. Design of goods,
  3. Price,
  4. Nature of packing shipment,
  5. Mode of shipment,
  6. Period of delivery,
  7. Mode of payment.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 6.
What is meaning of consular invoice?
Answer:
Where the customs duties are charged on the basis of value of goods at import’s port (ad-valorem basis), the customs officers are empowered to open the consignment to calculate duties. In order to avoid this problem exporter obtains consular invoice and sends it over to the importer.

This document is signed by the consul of importer’s country stationed in exporter’s Country. Hence customs officer at the port of destination will not open the consignment and simply access customs duty based on the value declared in the invoice. They simply accept the invoice as true statement of the content of the consignment.

Question 7.
What is meant Charter Party?
Answer:
A charter party is a formal agreement between shipowner and the exporter under which exporter hires an entire ship or a major part of ship either for a particular voyage or for a specific time period when the shipping is heavy.

Question 8.
Write a short note on Mate’s receipt?
Answer:
Mate’s Receipt is the document issued by the captain of the ship acknowledging the receipt of goods on board by him to the port of specified destination. This contains details like quantity of goods shipped, number of packages condition for packing, etc.,

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 9.
What is Bill of Lading?
Answer:
Bill of Lading, refers to a document signed by ship owner or to his agent mentioning that goods specified have been received and it would be delivered to the importer or his agent at the port of destination if good condition subject to terms and conditions mentioned therein.

Question 10.
What are the procedures relating to Export trade?
Answer:
(i) Receiving Trade enquiry:
Exporter receives trade enquiry (written request) from the importer / his agent who intends to buy the product.
(a) Specification about the goods like, size, design, quality, and brand name.
(b) The period up to which his proposal to import is valid.

(ii) Receiving Indent and Sending Confirmation:
After the scrutiny of quotation / proforma invoice, the buyer who intends to buy the goods sends an indent to exporter. The latter may either receive the order directly from the importer or through an agent who acts as an intermediary between the exporter and the importer.

(iii) Obtaining Importer Exporter Code (IEC) and RBI code Number:
Exporter has to apply in Ayaab Niryatt Form 2A(ANF2A) to the Regional Authority of the Director-General of Foreign Trade (DGFT) in the region where the registered office of the company is located. Exporter has to mention the number in all the shipping documents.

(iv) Obtaining Registration cum Membership Certificate (RCMC) from export Promotion Council /Commodity Board:
An Exporter is required to obtain RCMC from Export Promotion Councils/ Commodity Board/Development Authority in order to avail himself/herself of export incentives, concessions, and other facilities offered by Government.

(v) Manufacturing / Procuring Goods and Packing items:
Exporters steps into manufacturing and procuring of goods required by the importer.

(vi) Export Inspection Certificate:
After specifications of importer, the exporter has to apply to the Export Inspection Agency (EIA) or other designated agency in this connection The agency sends an inspector to inspect the consignment meant for export.

(vii) Insurance of Goods:
Exporter has to arrange for getting the goods insured to protect them against the various risks like deterioration, collision, immersion, fire, entry of seawater etc., as per the instructions of importer if any.

(viii) Certificate of Origin:
Import regulation of foreign countries may require that all these import consignments must accompany a certificate of origin.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 11.
Distinguish between Bill of Lading and Charter Party.
Answer:

TN Board 11th Commerce Important Questions Chapter 26 Export and Import 1

Question 12.
What are the documents used in Export Trade?
Answer:
Documents are used regarding goods:

  1. Open indent
  2. Closed indent
  3. Confirmatory indent.
  4. Certificate of origin.
  5. Certificate of verification.

Document are used regarding shipment:

  1. Mate’s receipt.
  2. Bill of lading.
  3. Marine insurance.
  4. Customs Formalities.
  5. Airway Bill.

Documents are used in payment by away of:

  1. Letter of credit
  2. Bills of exchange
  3. Foreign draft
  4. Excise duty.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 13.
Explain the various functions of Export Trading Houses.
Answer:
The functions of export house are:
(i) Identifying potential market for a product.
(ii) Finding buyers and their agent and eliciting their response for export proposal.
(iii) Establishing product specification in the light of market needs, standards, and regulation in accordance with suppliers capabilities.
(iv) Determining appropriate mode of transportation and routing keeping in mind the cost, quality of service, and security.
(v) Preparing the goods for delivery at destination.
(vi) Determining buyer’s creditworthiness.
(vii) Negotiating the transactions.
(viii) Arranging proper insurance coverage against maritime risks and currency fluctuations. .
(ix) Financing the transactions and paying for goods and services received.
(x) Preparing document for international trade.
(xi) Settling claim.

Question 14.
Import Trade Procedures.
Answer:

  1. Trade enquiry.
  2. Obtain import license
  3. Obtaining foreign exchange.
  4. Placing the indent.
  5. Arranging letter of credit.
  6. Obtaining shipping documents.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 15.
Agencies involved in Import Trade.
Answer:

  • Indent houses.
  • Clearing agents.

Question 16.
You should be able to think to simplify Import Trade Procedures.
Answer:

  • Trade enquiry,
  • Arranging letter of credit.
  • Receiving payments.

Question 17.
Create interest in International Business for yourself.
Answer:

  1. Take interest in International business.
  2. To get more profit.
  3. To give employment opportunities to public.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Choose the Correct Answer:

Question 1.
EPC stands for:
(a) export processing commission
(b) export promotion council
(c) export carriage council
(d) export promotion congress
Answer:
(b) export promotion council

Question 2.
STC is expansion for:
(a) state training centre
(b) state training council
(c) state trading centre
(d) state trading Corporation
Answer:
(d) state trading Corporation

Question 3.
An _______ is document prepared by importer an sent to the exporter to buy the goods.
(a) invoice
(b) indent
(c) enquiry
(d) charter party
Answer:
(b) indent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Question 4.
The ______ receipt is an acknowledgement of receipt of goods on the ship issued by the Captain.
(a) shipping bill
(b) bill of lading
(c) mate’s receipt
(d) consular invoice
Answer:
(b) bill of lading

Question 5.
The Exporters appoint the _______ agent to fulfill the customs formalities.
(a) clearing agent
(b) forwarding agent
(c) commission agent
(d) factor
Answer:
(b) forwarding agent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 26 Export and Import

Samacheer Kalvi 11th Commerce Notes Chapter 26 Export and Import

→ Exports have attained greater importance in the competitive world. No country in the world can produce all the goods and services it required. They have to inevitably buy and sell from one another. Therefore countries have to engage in international trade. Export and Import represent two sides of the same coin of international trade.

→ The goods which are not available in home country same goods were imported. The goods which are produced surplus good which will be exported to other countries.

→ Developing countries like India, Bangladesh, South Korea and so on require substantial amount of foreign exchange in order to acquire machineries, equipment, raw materials, petroleum products, technical know – how and so on for their faster economic development.

→ Government of India has initiated several steps to encourage exports. It has been promoting export by providing cash incentives, tax incentives and relief, institutional, support concessional interest rate, loan assistance, tax exemptions, tax holidays and transport concessions.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 31 Discharge and Breach of a Contract

TN State Board 11th Commerce Important Questions Chapter 31 Discharge and Breach of a Contract

Question 1.
What are the kinds of consent?
Answer:
The kinds of consent are:

  1. Express: Express consent may be given at the time of formation of the contract or subsequent to its formation.
  2. Implied: The contracts are also discharged by implied consent.

Question 2.
What are the types of Impossibility of Performance?
Answer:

  1. Impossibility existing at the time of agreement.
  2. Impossibility arising subsequent to the formation of contract.

Question 3.
What is Quantum merit?
Answer:
The claim for quantum merit may arise if a contract performed by one party has become discharged by breach of the other party. The meaning of the phrase quantum merit is ‘as much as earned’. The claim is not for the original contract that has been discharged or void, but on an implied promise by the other party to pay for what he has done

Question 4.
What are the different modes of discharged by implied consent?
Answer:
The contracts are also discharged by implied consent, different modes of discharge by implied consent are mention below:

  1. Novation,
  2. Alteration,
  3. Recession,
  4. Remission,
  5. Accord and Satisfaction,
  6. Waiver and
  7. Merger.

Question 5.
Define discharge by Performance.
Answer:

  1. Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time and manner prescribed.
  2. Performance of contract may be of two types namely
    (a) Actual performance and
    (b) Attempted performance.

Question 6.
What are reasons for impossibility arising after the formation of contract?
Answer:
(i) According to the Section 56 of the Act, all acts to do impossible acts are void. There are two types of impossibility of performance such as
(a) Impossibility existing at the time of agreement,
(b) Impossibility arising subsequent to the formation of contract.

(ii) On the other hand, impossibility of performance existing at the time of performance of a contract may be either
(a) Known to the parties or
(b) Not known to the parties.

(iii) Likewise impossibility arising subsequent to the formation of a contract or supervening impossibility maybe
(a) By some event beyond the control of the parties or
(b) By some act either of the promisor or of the promisee.

Question 7.
What are the various rules regarding damages?
Answer:

  1. Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him.
  2. As per contract, one party can claim damages if other party breach the contract.
  3. The main purpose of awarding the damages is to make good the loss suffered by him.
  4. There are mainly four types of damages, such as
    (a) Ordinary damages.
    (b) Special damages.
    (c) Vindictive or exemplary damages and
    (d) Nominal damages.

Question 8.
Explain the ways of discharge of Contract.
Answer:
(i) Discharge by performance:
Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time and manner prescribed. Performance of contract may be of two types namely
(a) Actual performance,
(b) Attempted performance.

(ii) By agreement on consent:
Agreement between the parties comes to an end by mutually agreeing for it. Any contract is created by an agreement, hence m the same way, it can be discharged by an agreement. In this connection the rule of law is as follows. “Eodem modo qus and quide constitutor, eodem modo destruitur,” the meaning of which is that a thing may be destroyed in the same manner, in which, it is constituted. The consent may be of the following types.

Express:
Express consent may be given at the time of formation of the contract or subsequent to its formation.

Implied:
The contracts are also discharged by implied consent, different modes of . discharge by implied consent are –

  1. Novation,
  2. Alteration,
  3. Recession,
  4. Remission,
  5. Accord and Satisfaction,
  6. Waiver and
  7. Merger charge.

(iii) By Impossibility of Performance:
A contract may be discharged if its performance becomes impossible. The rule of impossibility of performance is based on the following maxims

  • the law does not recognize what is impossible and
  • what is impossible does not create an obligation

(iv) By Lapse of Time:
According to the Limitation Act, 1963 a contract must be performed within a specified time. If it is not performed within this specified time limit and against which if no action is taken by the promisee in the Court of Law within specified time, then the promisee is deprived of his remedy at law. In such cases, the contract is discharged.

(v) By Operation of Law:
A contract can be discharged by the operation of law. The operation of law by which contract can be discharged are as follows:
(a) By Death,
(b) By Merger,
(c) By Insolvency,
(d) Unauthorized Alteration ofthe Terms of a Contract,
(e)Rights and liabilities vesting in the same person.

Question 9.
Write about the various remedies for breach of contract.
Answer:
Remedies for Breach of Contract:
All parties to a contract are expected to perform their promises. When one party refuses to perform his promise, then the breach of contract takes place. The other party or parties are called aggrieved or injured party or parties. There are various types of remedies for the injured parties. They are:
(a) Recession of Contract,
(b) Claim for Specific Performance,
(c) Claim for Injunction,
(d) Claim for Quantum Merit and
(e) Claim for Damages.

(i) Recission of Contract:
In case of breach of contract by one party, then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

(ii) Claim for Specific Performance:
In some specific cases if the damages are not the adequate remedy, then the court can direct the party in breach for the specific performance of the contract. In such case, the promise is carried out as per terms and conditions of the contract.

(iii) Claimfor damages:
Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him. As per contract, one party can claim damages if other party breach the contract. The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution. The Section 73 of the Indian Contract Act, 1872 deals with the compensation for loss or damages caused by a party for breach of contract. There are mainly four types of damages, such as
(a) Ordinary damages,
(b) Special damages,
(c) Vindictive or exemplary damages and
(d) Nominal damages.

(iv) Claim for Quantum Merit:
The claim for quantum merit may arise if a contract performed by one party has become ‘ discharged by breach of the other party. The meaning of the phrase quantum merit is ‘as much as earned’. The claim is not for the original contract that has been discharged or void, but on an implied promise by the other party to pay for what he has done.

(v) Claim for Injunction:
Injunction is an order passed by a competent court restraining a person from doing some act. Injunction can be defined as a mode of securing the specific performance of the negative terms of a contract. Negative terms of contract imply doing something, which a party has promised not to do. Injunction is an order which is granted by the court restraining the person to do what he had promised not to do.

Question 10.
Discuss the different types of damages awarded to the injured party.
Answer:
Claim for damages:
Damages are a monetary compensation awarded by the court to the injured party for the loss or injury suffered by him. As per contract, one party can claim damages if other party breach the contract. The main purpose of awarding the damages is to make good the loss suffered by him. It is known as doctrine of restitution. The Section 73 of the Indian Contract Act, 1872 deals with the compensation for loss or damages caused by a party for breach of contract. There are mainly four types of damages, such as-
(a) Ordinary damages,
(b) Special damages,
(c) Vindictive or exemplary damages and
(d) Nominal damages.

(a) Ordinary damages:
Damages that arises ordinary course of business from the breach ‘ of contract is called ordinary damages.
eg: A, He is a seller, B, He is a buyer. B order the sugar 100 bags ₹ 2000 per bag. Amount to be paid at the time of delivery. At the same time the price increased from ₹ 2,000 to ₹ 2,500. A refused to sell sugar. It is called ordinary damage.Special damage: Special damages .are those damages that are payable for the lose arising due to some special circumstances.

(iii) Vindictive exemplary damages:
These damages are claims against the party who has committed to refuse die contract. So he compensates the aggrieved party, eg: Dishonour of a cheque.

(iv) Nominal damages:
These damages are claimed to the aggrieved party. In this case loss is very small amount. When there is only technical violation of the legal rights.

Question 11.
To draw inference about the nature of contract and legal ways of discharging it.
Answer:
(i) Performance implies carrying out the obligation of the contract.
(ii) Performance must be completed according to die real intentions of the agreement, performance must be done according to the time and manner prescribed.

Question 12.
To understand the modes of discharge of contract.
Answer:
To explain two modes of discharge of contract.
Merger: Two or more contracts combined together to form a contract and discharge of contract.

Question 13.
To interpret the consequence of breach of performance of contract.
Answer:
All parties to a contract are expected to perform their promises when one party refuses to perform his promise. Then the breach of contract takes place.

Question 14.
Illustrate with example the modes of discharge of contract and if not discharged, the consequences.
Answer:
Recission of contract:
In case of breach of contract by one party then the other parties may rescind the contract and thereby the party is absolved from his all obligations under the contract.

Question 15.
To foresee the suitability of remedies for breach of contract violation of which leading to legal consequences.
Answer:
Remedies of breach of contract for that to claim damages.
Ordinary damages:
Damages that arises in the ordinary course of events from, the breach of contract are called ordinary damages.
eg: Annie contracted to sell and deliver Bala 100 bags of Dhall at ₹ 3000 per bag and price to be paid at the time of delivery.
The price of Dhall is raised to ₹ 4000 per bag and Annie refused to sell the dhall. Bala can claim damages at the rate of ₹ 1000 per bag.

Choose the Correct Answer:

Question 1.
On the valid performance of the contractual obligation by the parties, the contract:
(a) is discharged
(b) becomes enforceable
(c) becomes void
(d) none of these
Answer:
(a) is discharged

Question 2.
An agreement to do an act impossible in itself under Section.56 is:
(a) void
(b) valid
(c) voidable
(d) unenforceable
Answer:
(a) void

Question 3.
Any agreement which becomes impossible to perform under various circumstances:
(a) voidable
(b) void
(c) valid
(d) none of these
Answer:
(b) void

Question 4.
Discharge by mutual agreement may involve:
(a) novation
(b) rescission
(c) alteration
(d) all of the above
Answer:
(d) all of the above

Question 5.
The compensation given for breach of contract is:
(a) damage
(b) remuneration
(c) money
(d) cheque
Answer:
(a) damage

Samacheer Kalvi 11th Commerce Notes Chapter 31 Discharge and Breach of a Contract

→ Discharge of contract implies termination of the contractual relationship between the parties. A contract is discharged if it ceases to operate and when the rights and obligations created by it come to an end. Sometimes other rights obligations may arise as a result of discharge of the contract. These are independent of the original contract.

→ Modes of discharge of contract: Different modes of discharge of contract have been provided under different section of the act.

→ Discharge by performance: Performance implies carrying out the obligation of the contract. Performance must be completed according to the real intentions of the agreement. Performance must be done according to time manner prescribed.

→ Performance of contract may be of two types namely:

  • Actual performance,
  • Attempted performance.

→ Agreement between the parties comes to an end by normally agreeing for it. Any contract is created by an agreement. At the same time it can be discharged by an agreement.

→ The consent may be of the following types:

  • Express and
  • Implied.

→ Remedies for breach of contract:
All parties to a contract are expected to perform their promises. When one party refuses to perform his promises. Then the breach of contract takes place. The other party or parties are called aggrieved or injured party or parties.

→ Remedies:
There are various types of remedies for the injured parties listed as follows:

  1. Recission of contract,
  2. Claim for specific performance,
  3. Claim for injuction,
  4. Claim for quantum merit and
  5. Claim for damages.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

TN State Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 1.
State the ways of performing a Contract.
Answer:
There are mainly two ways of performing a contract. They are-

  • Actual Performance and
  • Attempted performance.

Question 2.
Who is a Legal Representative?
Answer:

  1. If the promisor dies, the legal representative of the deceased promisor is bound to perform the contract, (section-37).
    eg: Mr. Raja promises to sell his car for ₹ 5,00,000 to Kannan after a week.
  2. But Raja dies after 5 days of the contract ’ Raja’s representative will be liable to sell the car to Kannan.
  3. Kannan will be liable to pay ₹ 5,00,000 to Raja’s representative.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 3.
Who is an agent?
Answer:
According to Para 2 of Section 40, the promisor may employ a competent person such as agent to perform the promise, if the contract is not formed on personal condition.

Question 4.
Define Reciprocal Promise.
Answer:

  1. According to Section 2 (f) of the Indian contract Act 1872 as defines reciprocal promise.
  2. Promises which form consideration or part – of consideration for each other are called ‘reciprocal promise’.

Question 5.
By whom must contracts be performed?
Answer:
The contract may be performed by the following persons.

  1. The promisor himself.
  2. The agent.
  3. The legal representative.
  4. The third person.
  5. The joint promisor.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 6.
What is a Valid tender?
Answer:
A tender is an offer to do or perform an act which the party offering is bound to perform to’ the party to whom the offer is made. A tender may be of money or of specific articles these will be separately considered. of the lender of money to make a valid tender the following requisites are necessary.

Question 7.
Who can execute and Perform a Contract?
Answer:
(i) Promisor himself:
The contract must be performed by the promisor himself or by his legal representatives, or by any other competent person employed by him then such promise must be performed by the promisor himself Or by his legal representatives or by an other competent person employed by him.

(ii) Agent:
An agent is appointed by the promisor for the purpose of perform a contract.

(iii) Representations:
If the promisor dies. Of course in case of other contracts, the legal representatives of a deceased promisor are bound to perform the contract sec.37.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 8.
Who can demand performance?
Answer:
The following are those who can demand the performance of a valid contract.
(i) Promisee:
Only a promisee can demand performance and not a stranger demand performance of the contract.

(ii) Legal representative:
Legal representative can demand Exception performance. Contrary intention appears from the contract. Contract is of a personal nature.

(iii)Third party:
‘Exception to “Stranger to a contract”.

Question 9.
Write a note on the benefits of Reciprocal Promise.
Answer:
(i) Mutual and Independent:
Where each party must perform his promise independently without the performance of the other, the promise are mutual and independent, eg: Ramu agrees to pay Somu the amount for the rice supplied on 10th June. Somu promises to deliver rice on 18th June.

(ii) Mutual and Dependent:
Where the performance of the promise by one party depends upon prior performance of promise by the other party, the promises are conditional and dependent, eg: A agrees to construct a building for B. B agrees to supply cement for the construction. Hence A’s promise to perform depends on B’s promis

(iii) Mutual and Concurrent:
Where the two promises are said to be performed simultaneously, they are said to be mutual and concurrent.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 10.
Who is a Joint Promisors?
Answer:
Section.42 of Indian Contract Act lays down that “When two or more persons have made a joint promise, then unless a contrary intention appears in the contract, all, such persons, during their joint lives and after the death of the last survivor, representatives of all, jointly must fulfil the promise”.

Question 11.
Explain rules relating to place of performance of promise.
Answer:
(i) Under Section 46:
Performance within a reasonable time: According to Section 46, a promisor is to perform his promise within a reasonable time. On the other hand, reasonable time will depend upon the circumstance of the case, the usage of trade or on the intention of the parties entering into the contract.

(ii) Under Section 47:
Specified time and place for performance: If the promise is to, be performed on a certain day, the promisor may undertake to perform it without application of the promisee. According to the Section 47, In such a case the promisor may perform the promise at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.

(in) Under Section 48:
Performance on a certain day: If the promise is to be performed on a certain day the promisor may undertake to perform it after the application by the promisee to that effect.

(iv) Under Section 49:
Performance of promise when no place is fixed and without application: If the promise is to be performed without application by the promisee and where no place is mentioned to be performed of tlhe contract then it is the duty of the promisor to apply to the promisee to provide a reasonable place for the performance of the promise and to perform it at such place.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 12.
Elucidate the provision regarding time as factor in performance.
Answer:
(i) Under Section 46, performance within a reasonable time:
According to Section 46, a promisor is to perform his promise within a reasonable time. On the other hand, reasonable time will depend upon the circumstance of the case, the usage of trade or on the intention of the parties entering into the contract.

eg: A has given an order of supply of books in July which should be performed within 4 to 5 days of the month of July.

(ii) Under Section 47, specified time and place for performance:
If the promise is to be performed on a certain day, the promisor may undertake to perform it without application of the promisee. According to the Section 47, In such a case the promisor may perform the promise at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.

(iii) Under Section 48, performance on a certain day:
If the promise is to be performed on a certain day the promisor may undertake to perform it after the application by the promisee to that effect.

(iv) Under Section 49, performance of promise when no place is fixed and without application:
If the promise is to be performed without application by the promisee and where no place is mentioned to be performed of the contract then it is the duty of the promisor to apply to the promisee to provide a reasonable place for the performance of the promise and to perform it at such place.

eg: M takes to deliver 1,000 kilos of wheat to N on a fixed day. M must apply to appoint a reasonable place for the purpose of receiving it and must deliver it to him at such place.

(v) Under Section 50, performance is prescribed by the promisee:
According to Section 50, the performance of any promise may be made in any manner or at any time which the promisee prescribes.

eg: T owes S ₹ 2,00,000/- to accept T’s car value of ₹ 1,00,000/- in reduction of the debt. The delivery of the car will amount to a part payment of the debt.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 13.
How do you think appropriation of payments takes place?
Answer:
‘Appropriation means application of payments – The question of appropriation of payments arises when a debtor owes several debts to the same creditor and makes a payment that is not sufficient to discharge the whole indebtedness.

(i) Appropriation of Payments:
Sometimes, a debtor owes several distinct debts to the same creditor and he makes a payment which is insufficient to satisfy all the debts. In such a case, a question arises as to which particular debt the payment is to be appropriated. Section 59 to 61 of the Act lay down following rules as to appropriation of payments which provide an answer to this question.

(ii) Appropriation as Per express Instructions:
Every debtor who owes several debts to a creditor has a right to instruct his creditor to which particular debt, the payment is to be appropriated or adjusted. Therefore, where the debtor expressly states that the payment is to be applied to the discharge of a. particular debt, the payment must be applied accordingly.

eg: X owes Y three distinct debts of ₹ 20,000, ₹ 30,000 and ₹ 50,000 X sends ₹ 50,000 and instructs Y that the payment should be appropriated against the third debt. He is bound to appropriate the payment against the third debt only.

(iii) Application of payment where debt to be discharge is not indicated [60] :
If section 60 is attracted, the creditor shall have the discretion to apply such payment for any lawful debt which is due to him from the person making the payment.

eg: P owes to Q, among other debts, the sum of ₹ 10,000. Q writes to P and demands payment of this sum. P sends to Q ₹ 10,000. This payment is to be applied to the discharge of the debt of which Q had demanded payment.

(iv) Application of payment where neither party appropriates [61]:
The payment shall be applied in discharge of the debts in order of time whether they are or are not based by the limitation Act 1963, if the debt are of equal standing (i.e. payable on the same date) the payment shall be applied in discharge of each of these debt proportionately.

Question 14.
To identify the performance and distinguish the performance as actual or attempted.
Answer:

  1. When the party has done what he had undertaken to do. It is called actual performance.
  2. When the party offers to perform his obligation. Itisnotacceptedbythepromisee, so it is called offer to performance.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 15.
To understand the time and place of performance, so that the contract is established to be discharged or not.
Answer:

  1. If the promise is to be performed on a certain day, the promisor may undertake the perform it without application of promise.
  2. However, the promise should be performed at the place where it was required to be performed.

Question 16.
Suggest ways by which the nature of performance of a contract can be categorised.
Answer:

  1. Apromisor is to perform his promise within a reasonable time.
  2. On the other hand, reasonable time will depend upon the circumstances of the case.

Question 17.
To identify those who are involved in the process of performance of contract and their legal status.
Answer:

  1. The contract should be performed by the promisor by himself. He is like a legal representative.
  2. Contract which are not of personal nature may be performed by an agent who is likely a promisor.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Choose the Correct Answer:

Question 1.
On the validperformance of the contractual obligations by the parties, the contract:
(a) is discharged
(b) become enforceable
(c) becomes void
(d) becomes legal
Answer:
(a) is discharged

Question 2.
Which of the following persons can perform the contract?
(a) Promisor alone
(b) Legal representatives of promisor
(c) Agent of the promisor
(d) All the above
Answer:
(d) All the above

Question 3.
A, B, C jointly promised to pay ₹ 50,000 to D. Before performance of the contract, C dies. Here, the contract:
(a) becomes void on C’s death
(b) should be performed by A and B along with C’s legal representatives.
(c) should be performed by A and B alone.
(d) should be renewed between A, B and D.
Answer:
(b) should be performed by A and B along with C’s legal representatives.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Question 4.
Which of these parties cannot demand performance of promise?
(a) Promisee
(b) Any of the Joint Promisees
(c) On the death of a Promisee, his Legal Representative.
(d) Stranger to the Contract
Answer:
(d) Stranger to the Contract

Question 5.
A person is said to be a third person if he is hot a:
(a) promisor
(b) promise
(c) agent
(d) Legal Representative
Answer:
(c) agent

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 30 Performance of Contract

Samacheer Kalvi 11th Commerce Notes Chapter 30 Performance of Contract

→ Regarding the performance of contract, section 37 of the act states that the parties to a contract must be either.
(i) Perform their respective promises of
(ii) Offer to perform the same
(iii) Such performance is dispensed with or
(iv) Excused under the provisions of the act or of any other law.

→ There are mainly two ways of performing a contract such as actual performance, attempted performance. Who will perform the contract?
(i) Promiser himself
(ii) Agent
(iii) Representations
(iv) Third parties
(v) Joint promisors
To explain about the devolution of joint rights and joint liabilities.

→ Joint rights:
“When a person has made a promise to two or more persons jointly, then unless there is a contract to the contrary, the right to claim performance rests as between him and them. With them during their joint lives, and after the death of them with representatives of such deceased person jointly with survivors and after the death of last survivor, with the representatives of all jointly.”

→ Devolution of joint liabilities:
Section 42 of Indian contract act lays down that “when two or more persons have made a joint promise, then unless a contrary intention appears in the contract, all such persons, during the joint lives and after the death of the last survivor, representatives of all jointly must fulfil the promise.

TN Board 11th Commerce Important Questions

TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

TN State Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 1.
Give the meaning of Trade?
Answer:
The buying and selling of goods and services consists of trade. Trade is conducted in order to earn profit. Trade acts as an intermediary in the exchange of commodities between the producer and consumer.

Question 2.
What is Internal Trade?
Answer:
Buying and selling of goods and services within the boundaries of a country are called internal trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 3.
Mr. Vikram who runs a textile industry regularly procures cotton from Germany. Name the type of trade he is engaged in.
Answer:
Import trade. Buying goods from foreign country for domestic use.

Question 4.
When Vikram of India sells cotton shirts to Amal of England, what type of trade he is engaged in?
Answer:
Export trade. It means sale of domestic goods to foreign countries.

Question 5.
How do you classify Trade?
Answer:
On the basis of geographical location of buyers and sellers, trade can be broadly classified into two categories

  • Internal trade and
  • External trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 6.
What are the classifications of internal trade?
Answer:

  • Wholesale trade and
  • Retail trade.

Question 7.
What is import trade?
Answer:
Import trade means buying goods from a foreign country for domestic use.
eg; India imports petroleum products from Gulf Countries. India imports machinery, equipment, materials etc.

Question 8.
Explain the meaning of Entrepot trade.
Answer:
Entrepot trade means importing of goods from one country and exporting the same to foreign countries. It is also known as ‘Re-export trade’.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 9.
TVS is selling motor bikes in Europe. Under which type of trade can this be classified?
Answer:
Under Foreign Trade.

Question 10.
What is the currency used in India in internal trade?
Answer:
Rupees, (i.e) Indian currency.

Question 11.
What is the classification of Foreign trade?
Answer:
Foreign Trade is classified as Import Trade, Export Trade and Entrepot Trade.

  1. Import trade: Buying goods from foreign country.
  2. Export trade: Selling goods to foreign country.
  3. Entrepot: Importing of goods from one country and exporting the same to foreign countries.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 12.
Give two examples of Entrepot trade.
Answer:

  1. Indian diamond merchants in Surat import uncut raw diamonds from South Africa.
  2. They cut and polish the diamonds in their units in India and re-export them to the International Diamond Market in Amsterdam.

Question 13.
What do you mean by Export trade?
Answer:
Export trade means the sale of domestic goods to foreign countries. Export trade is necessary to sell domestic surplus goods, to make better utilization of resources, to earn foreign exchange, to increase national income, to generate employment and to increase Government revenue.

  1. Export of Iron ore from India to Japan.
  2. Selling of Tea from India to England.
  3. Export of jasmine flowers from Madurai to Singapore.

Question 14.
What is Wholesale trade?
Answer:
“Purchase of goods” in bulk from the manufacturers and selling them in smaller quantities to other intermediaries” is known wholesale trade.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 15.
State the meaning of Retail trade.
Answer:
Retail trade deals with the distribution of goods in small quantities to the consumers.

Question 16.
Name any three retail traders in your locality.
Answer:

  1. Street Stalls,
  2. Second hand goods dealers,
  3. General stores,
  4. Speciality shops,
  5. Nilgiris super market,
  6. Reliance fresh,
  7. Mothers world.

Question 17.
State the main aim of trade.
Answer:
After the invention of money as a medium of exchange, all purchases are made in exchange of money. Similarly sale transactions are possible in exchange of money. Trade is conducted in order to earn profit.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 18.
What are thefeatures of Internal trade?
Answer:
The following are the features of internal . trade:
(i) The buying and selling of goods takes place within the boundaries of the same country.
(ii) Payment for goods and services is made in the currency of the home country.
(iii) It involves transactions between the producers, consumers and the middlemen.
(iv) It consists of a distribution network of middlemen and agencies engaged in exchange of goods and services .
(v) In home trade the risk of transportation is very less when compared to the foreign trade.
(vi) In home trade the laws prevailing in that country only have to be followed.
(vii) The aim of home trade is to provide the goods and services economically.
(viii) The goods must be a part of domestic production.
(ix) Goods must be purchased from an individual or a firm established within a country. .
(x) Goods can be delivered using locally available modes of transport.
(xi) It does not involve any custom/import duty, but buyers need to pay the taxes to the Government.

Question 19.
Explain briefly the different types of Foreign trade?
Answer:
Types of Foreign Trade:
(i) Import Trade:
Import trade means buying goods from a foreign country for domestic use. eg: India imports petroleum products from Gulf Countries. India imports machinery, equipment, materials etc. It is necessary to speed-up industrialization, to meet consumer demands and to improve standard of living.

(ii) Export trade:
Export trade means the sale of domestic goods to foreign countries.
Export trade is necessary to sell domestic surplus goods, to make better utilization of resources, to earn foreign exchange, to increase national income, to generate employment and to increase Government revenue,
eg: (i) Export of Iron ore from India to Japan,
(ii) Selling of Tea fromIndia to England,
(iii) Export of jasmine flowers from Madurai to Singapore.

(iii) Entrepot trade means importing of goods from one country and exporting the same to foreign countries. It is also known as ‘Re-export trade’.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 20.
Student should go to nearby internal trade unit, and observe the trade activities.
Answer:
Student Name: Raja. He is going to Leather Garments, Keelkattalai (pouch).
1st step : Buying fill leather.
2nd step : Cutting the leathers in suitable shape.
3rd step : Stitching the leathers.
4th step : To form the pouch.

Question 21.
Students should go to retail shop, and observe the trading activities.
Answer:
To observe the retail shop. Student observe the retail shop.

  1. In retail shop all food items.
  2. In retail shop all snacks items.
  3. In retail shop all oil items.
  4. In retail shop all kinds of soaps.
    Student’s observation is all kinds of items are sold here.

Question 22.
In future the location of trade houses will be completely changed, where the customers place order by mobile phone or e-mail andit should be delivered at door step of the buyer.
Answer:
In future he need for trade houses. Because nowadays by using network to buy all the goods.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 23.
In future there is no need for showrooms, displays, window decorations, etc. retail shops provide code numbers to the products and hence there is no heed for retail shop. So, the students should be prepared to meet future changes.
Answer:
Yes, students should be prepared to meet future changes. All items are available in net based shopping.

Question 24.
Mr. Kovalan completed his M.Com., degree and proposed to start a business dealing powerloom machines.
Answer:
After a complete analysis, it was found that it is better to buy from foreign countries than to buy from domestic manufacturers. So what is your opinion whether to purchase from foreign countries or from domestic manufacturers.
Better to buy from domestic manufactures. Because our country gets more income from income tax and giving more employment opportunities.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Choose the Correct Answer:

Question 1.
The purchase of goods from a foreign country is called:
(a) Import
(b) Export
(c) Entrepot
(d) Re-export
Answer:
(a) Import

Question 2.
When goods are imported for the purpose of export it is called as:
(a) Foreign Trade
(b) Home Trade
(c) Entrepot
(d) Trade
Answer:
(c) Entrepot

Question 3.
_______ acts as a connective link between the producer and the consumer.
(a) Trade
(b) Industry
(c) Commerce
(d) Business
Answer:
(a) Trade

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Question 4.
The aim of home trade is:
(a) To raise the standard of living
(b) To provide the essential goods and services economically
(c) To raise the national income
(d) To obtain all types of goods.
Answer:
(b) To provide the essential goods and services economically

Question 5.
Internal trade can be classified into ________ categories.
(a) three
(b) four
(c) two
(d) five
Answer:
(c) two

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 22 Types of Trade

Samacheer Kalvi 11th Commerce Notes Chapter 22 Types of Trade

→ Every country is endowed with some kind of natural resources. These natural resources are abundantly available in some places but very scarce in sdme other places. The goods are produced have to be taken to the ultimate beneficiaries that is the customers through a sustenatic process. Such a systematic process refers to trade.

→ Trade establishes relationship between producer and consumer. Its act as an essential link between the buyer and seller. Trade is removed by personal hindrance.

→ Internal trade consists of small scale and large scale retail organisation. A population goes on increasing, demands of people also go on multiplying. Both small scale and large scale retail organisation play a crucial role in this regard. Trade deals with web- marketing, internet marketing and e-commerce and their applications to business.

→ While trade beyond the physical boundaries of a country is known as foreign trade, exchange of goods among many countries is better known as international trade. Now-a-days no country can remain isolated or completely independent. Hence interdependence of countries necessitates international trade.

TN Board 11th Commerce Important Questions