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.
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.
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’.
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.
- Import trade: Buying goods from foreign country.
- Export trade: Selling goods to foreign country.
- Entrepot: Importing of goods from one country and exporting the same to foreign countries.
Question 12.
Give two examples of Entrepot trade.
Answer:
- Indian diamond merchants in Surat import uncut raw diamonds from South Africa.
- 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.
- Export of Iron ore from India to Japan.
- Selling of Tea from India to England.
- 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.
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:
- Street Stalls,
- Second hand goods dealers,
- General stores,
- Speciality shops,
- Nilgiris super market,
- Reliance fresh,
- 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.
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’.
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.
- In retail shop all food items.
- In retail shop all snacks items.
- In retail shop all oil items.
- 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.
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.
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
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 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.