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Questions and Answers
What does commerce consist of?
What does commerce consist of?
- Manufacturing and production processes
- Financial services and investment banking
- Legal services and dispute resolution
- Trade and aids to trade along the entire supply chain (correct)
What are the principal factors that give rise to commercial exchanges?
What are the principal factors that give rise to commercial exchanges?
- Currency exchange rates, inflation rates, and stock market fluctuations
- Technological advancements, consumer preferences, and advertising strategies
- Diversity in the distribution of natural resources, differences of human needs and wants, and division of labour along with comparative advantage (correct)
- Government regulations, taxation, and international treaties
What is trade categorized into?
What is trade categorized into?
- Trade shows and exhibitions
- Domestic trade, including retail and wholesale as well as local (correct)
- International trade only
- E-commerce and m-commerce
What does commerce facilitate?
What does commerce facilitate?
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What is the primary purpose of trade?
What is the primary purpose of trade?
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What does microeconomics primarily analyze?
What does microeconomics primarily analyze?
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What does macroeconomics primarily analyze?
What does macroeconomics primarily analyze?
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What is the distinction between positive economics and normative economics?
What is the distinction between positive economics and normative economics?
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What does rational economics primarily focus on?
What does rational economics primarily focus on?
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What does behavioural economics primarily study?
What does behavioural economics primarily study?
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Study Notes
Commerce Overview
- Commerce consists of the activities involved in the buying and selling of goods and services.
- It encompasses various business activities including trade, logistics, and services that facilitate economic interactions.
Factors Leading to Commercial Exchanges
- Principal factors include supply and demand, market accessibility, consumer preferences, and economic conditions.
- These factors influence the initiation and growth of exchanges between buyers and sellers.
Trade Categories
- Trade is categorized into two primary types:
- Domestic Trade: Transactions within a country.
- International Trade: Transactions between different countries.
Functions of Commerce
- Commerce facilitates the distribution of goods and services from producers to consumers.
- It enhances market efficiency by creating a framework for exchange and providing infrastructure.
Purpose of Trade
- The primary purpose of trade is to generate profit through the exchange of goods and services.
- It promotes economic growth by improving resource allocation and encouraging specialization.
Microeconomics Analysis
- Microeconomics primarily analyzes individual and business decision-making processes.
- It focuses on the behavior of consumers and firms in specific markets.
Macroeconomics Analysis
- Macroeconomics primarily analyzes overall economic systems and large-scale economic factors.
- It examines national income, inflation, unemployment rates, and fiscal policies.
Positive vs. Normative Economics
- Positive economics deals with objective analysis and facts, focusing on "what is."
- Normative economics involves subjective analysis and opinions, focusing on "what ought to be."
Rational Economics Focus
- Rational economics primarily focuses on decision-making processes based on logical reasoning and optimal resource use.
- It assumes individuals act in their self-interest, seeking to maximize utility.
Behavioral Economics Study
- Behavioral economics primarily studies the psychological factors influencing economic decisions.
- It examines how human behavior deviates from traditional economic theory, allowing for irrational decision-making.
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