Attempt the following.
1) What do you mean by commerce?
Commerce involves the distribution of goods and services. Commerce is a part of the business.
Business is divided into two parts.
They are (a) industry and (b) commerce.
Industries are concerned with the distribution of goods and commerce does the distribution of those goods in the market.Commerce helps in bringing the goods from the manufacturer to consumers by making an uninterrupted flow of goods.
Commerce includes main two activities –
(a) Trade and (b) Auxiliaries to trade.
1. Trade means buying and selling of goods and services. Any buying and selling are included in the trade. It can be industrial goods, consumer goods or buying and selling of services, etc.
2. Auxiliaries of trade are all those supportive services which help in the smooth conduct of trade. They include transport, banking, insurance, advertising, etc.
2) What is the meaning of export trade?
Trade is divided into two parts.
(a) Home trade and (b) Foreign trade.
Home trade is a trade conducted within the country whereas foreign trade is trade with other countries. When the goods are purchased from and sold to other countries it is included in foreign trade. Foreign trade is divided into three parts.
(a) Import trade,(b) Export trade and (c) Entrepot trade.
In case of export trade goods are sold to other countries e.g. A garment trader from India selling his garments to England Will be included in export trade. Export trade plays an important role in the economy of any country, it helps a country to get valuable foreign exchange for the country, it also helps to enhance the reputation of the country in the foreign market.
3) State the role of auxiliaries to trade in trading activities.
1. Auxiliaries to trade are all the services which help trade.
2. Trade means buying and selling of goods. However, buying and selling is not possible unless it is supported by different services which will make the trade easy.
3. There are different auxiliaries or services which support buying and selling. They are transport, warehousing, banking, insurance, advertising, etc.
4. These services help the trader as well as the buyers. They remove the hindrances in the process of distribution and ensure the smooth flow of goods from the manufacturer to the consumer.
5. In the modern world, manufacturers and consumers stay away from each other. It becomes very difficult for the manufacturer to contact the buyers and sell goods directly to them.
6. In this regard auxiliaries to trade help in establishing a link between the manufacturer or seller to consumer.
4) What are the different types of secondary industries?
Secondary industries are those which depend upon primary industry for production. Secondary industries take raw materials from primary industries and carry out their production.
Secondary industries are of two types:
1. Manufacturing industry: These industries are engaged in the manufacturing of various types of goods. They may be consumer goods or industrial goods. These industries convert raw materials into finished products. They make use of men, material, and money for production. Examples of these industries include the chemical industry, electronics industry, textile industry, paper industry.
2. Construction industry: These types of secondary industries are engaged in construction activities such as dams, bridges, buildings, roads, tunnels, etc. In the case of other industries, the goods are produced in one place but sold in different places. However, in case of construction industry, the construction takes place in one place only. Thus this industry creates immovable property.
5) State the types of human activities.
There are various activities conducted by a person in a day.
These activities can be divided into two parts. → Human Activities
1. Economic activities
2. Non-economic activities
1. Economic activities: These activities are conducted to earn money. A human being requires money for livelihood. Economic activities are divided into three types. (a) Business (b) Profession (c) Employment Business is done to earn a profit. The profession is done by acquiring special knowledge to provide services to people. A professional gets fees for the services rendered. Whereas when a person works for another person or organisation to earn wage or salary, is called employment.
2. Non-economic activities: Non-economic activities are conducted by the person to satisfy their needs other than financial needs. These activities include cultural, social, religious, sports, health-related, etc.
6) Describe the scope of internal trade.
Internal trade is a part of the trade. It includes buying and selling of goods within the country.
Internal trade is further divided into two parts.
1. Wholesale Trade: Wholesale trade is a trade conducted on a large scale. A wholesaler purchases goods in bulk from the manufacturer and sells them to the retailers. Wholesaler forms a large network through which he helps to distribute goods at distant places. A wholesaler is an expert trader in his field. He acts as a link between the manufacturer and the retailer.
2. Retail Trade: Retail trade is a trade conducted on a small scale. He purchases goods from the wholesalers and sells them to the consumers in the required quantities. The retailer comes into direct contact with the consumers. A retailer caters to the .needs of consumers by providing them various goods in whatever quantities they want.
7) How does banking and insurance help trading?
Commerce includes trade and auxiliaries to trade. Trade means buying and selling of goods and services. But buying and selling are not possible unless it is supported by the auxiliaries to trade. Thus auxiliaries to trade are the services which help trade.
Banking and insurance are two important auxiliaries to trade.
1. Banking: Banking services help traders in many ways. Branches of banks are spread over wider areas. Traders can open an account in the bank and take advantage of various banking services. Banks offer loans, overdrafts, transfer of money, letter of credit, foreign exchange facilities to the traders.
2. Insurance: There are various kinds of risks in the business. A businessman can transfer some risks on the insurance company. Goods can be destroyed by fire, theft or damage in transportation. The businessman can transfer these risks to the insurance company. He has to pay a premium to the insurance company and make a contract with the Insurance company. In case of loss, the insurance company pays compensation to the trader.
3. Thus, the risks cannot be avoided completely but can be minimized by taking an insurance policy.