Economics Chapter 8: Trade Types

Types of Trade

• On the basis of quantity of goods:

  • Wholesale Trade involves selling goods in large quantities to retailers or other businesses.
  • Retail Trade involves selling goods directly to consumers in smaller quantities.

• On the basis of the extent of trade region:

  • International Trade (External) refers to trade between countries.
    • On the basis of number of countries involved:
      • Bilateral Trade occurs between two countries.
      • Multilateral Trade involves more than two countries.
  • Domestic Trade (Internal) is trade that takes place within the borders of a country.

Balance of Trade

• The balance of trade is the difference between a country's export and import values over a specific period.
• Types of balance of trade:
  • Unfavorable balance occurs when imports exceed exports.
  • Favorable balance occurs when exports exceed imports.
  • Balanced balance occurs when exports and imports are nearly equal.

Objectives of WTO (World Trade Organization)

• Provides a negotiation platform for international trade.
• Addresses disputes related to trade.
• Monitors trade policies of member states.
• Offers technological assistance and training to developing countries.

Trade Organizations

• OPEC (Organization of Petroleum Exporting Countries):

  • Regulates international trade of crude oil.
  • Coordinates oil production and export rates among member states.

• APEC (Asia-Pacific Economic Co-operation):

  • Promotes free trade and economic cooperation among Asia-Pacific countries.
  • Encourages regional and technical cooperation among member states.

Important Trade Organizations in Asia

• SAARC (South Asian Association for Regional Cooperation):

  • Aims to resolve problems faced by South Asian countries.
  • Focuses on improving social welfare and living standards.
  • Seeks to promote regional cooperation and reduce unrest.

• ASEAN (Association of Southeast Asian Nations):

  • Aims to enhance social and cultural harmony alongside economic growth.
  • Promotes peace and regional stability.
  • Supports tax waivers to foster trade growth among members.

Importance of Marketing from Farmers' Perspective

• Effective presentation enhances the perceived value of agricultural products.
• Cleaned and properly packed products attract higher demand and pricing.
• Strategic marketing increases product availability to a broader customer base.
• Advertisements stimulate consumer interest and purchasing desire.

Corrections to Statements

• India is not a self-sufficient country.
• There is a demand for products even in areas with excess production, countering assumptions about trade difficulty.
• International trade involves more complexities compared to local trade.

Types of Trade Identifications

• Srushti’s purchase of sugar from a grocery exemplifies Retail Trade.
• Trades between Surat and farmers in Maharashtra represent Domestic Trade.
• Sameer exporting pomegranates to Australia illustrates International Trade.
• Sadabh’s purchase of wheat and rice for resale indicates Wholesale Trade.

Classification of Trade Between Regions

• Trade between Maharashtra and Punjab is classified as Domestic Trade.
• India trading with Japan is categorized as Bilateral International Trade.
• Trade between Lasalgaon and Pune reflects Regional Domestic Trade.
• Trade between China and Canada is an example of Bilateral International Trade.
• Trade between India and the European Union is classified as Multilateral International Trade.

Explore the various types of trade in Economics Chapter 8. This quiz delves into the classification based on quantity of goods and the extent of geographical regions, including domestic and international trade. Test your understanding of wholesale, retail, bilateral, and multilateral trade.