What Do You Mean By Trade? Describe Briefly Different Aids To Trade?

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Trade is the voluntary exchange of goods, services, or both. Trade is also called commerce or transaction.A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Later one side of the barter were the metals, precious metals (poles, coins), bill, and paper money. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.
Trade exists for man due to specialization and division of labor, most people concentrate on a small aspect of production, trading for other products. Trade exists between regions because different regions have a comparative advantage in the production of some tradable commodity, or because different regions' size allows for the benefits of mass production. As such, trade at market prices between locations benefits both locations.
Aids to trade:
There are various obstacles that can hinder the smooth running of trade. The activities that are involved in removing these obstacles are known as aids to trade. These obstacles and the activities that are performed to eliminate them are as follows:
The hindrance of place: Goods are produced at few places, but consumed at different places. This geographical distance between a manufacturer and a consumer can be eliminated by transport.
The hindrance of persons: There are limited numbers of producers as compared to consumers. These producers and consumers are linked to each other through various intermediaries such as wholesalers, retailers, etc.
The hindrance of time: There are some products that are produced during a particular season, but are in demand throughout the year. These products are needed to be stored and released at the time of requirement. This obstacle is eliminated by warehousing.
The hindrance of finance: There is a time gap between the production and sales of goods. If there is a need for finance to conduct trade activities during this period, it is met by banks. Banks and financial institutions help a businessman by providing overdrafts, loans, etc.
The hindrance of risk: Risk can be in the form of fire, theft, accidental loss, human error, etc. This risk can be eliminated by insurance companies.
The hindrance of knowledge: When a new product is produced, it should come into the knowledge of consumers. This can be eliminated by advertisements and salesmanship.
Great deals of difficulties are experienced in the course of exchange of goods and services. The activities which help in overcoming those difficulties or hindrances are called aids-to-trade or "auxiliaries to trade". The examples of aids-to-trade are banking, insurance, warehousing, transport and advertising. The significance of these aids-to-trade are:
Banking: Banks helps in overcoming the financial problems of the business enterprise. Banks provide finance for holding stock between the times of purchase to the time of sale.
Warehousing: Goods are generally produced in the anticipation of demand. All the goods produced are not consumed at the same time, warehousing provides suitable arrangement for storing the goods.
Insurance: It is regards as the best means of reducing risks of the business. Insurance covers the risks of loss to goods in transit and in warehouse on account of theft and fire.
Transport: It creates place utility of the products. It helps in carrying the goods from the production centre to the consumption centre and thereby creates place utility for the products.
Advertisement: Consumers are unaware on the new products. Advertisement and publicity bring the goods to the notice of the consumer.
Anonymous Profile
Anonymous answered
Trade simply means the buying and selling of goods and commodities.it is a means of exchange.in the olden days trade was done through trade by barter but now it is done with the use of money.
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Anonymous answered
Aid to trade are ways and services that helps goods and services to get where they are needed to go. Aids to trade are apart of commerce and commerce is that branch of human activity involved in the distribution and exchange of goods and services.

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