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O-level commerce Notes(5/5)

O level commerce notes

International trade


Is the buying and selling of goods and services in oder to satisfy human needs and wants.Trade between two countries is known as bi-lateral trade and that among many countries is multi-lateral trade.

Why Zimbabwe trade with other countries

  • Zimbabwe, like many other countries does not have all that it requires.Therefore it requires goods and services in oder to satisfy human needs and wants.
  • This is to obtain what it does not posses under climatic conditions.
  • Accessing a wide range of goods and services thereby uplifting the standard of its people.
  • Supplement shortages.
  • Make goods available all the year eg seasonal goods.

Difference between home and international trade

    • Trade among citizens.
    • Short distances are involved.
    • Fewer or no middlemen
    • No tariffs charged because there is less state interference.
    • Less transporting risks.
    • Local currency is used.
    • Citizens speak local language.
    • Documents used are fewer.
    • Transport costs are lower.
    • Trade between citizens of different countries
    • Long distances are involved.
    • More middlemen.
    • More tariffs are charged.
    • More risks are involved.
    • Foreign currency is used.
    • Citizens of different countries speak international languages.
    • Cost of transport are higher.
    • More documents needed.
    • Involve import and export.

Invisible trade

  • Trade in services only.
  • Usually calculated over a year.
  • Invisible balance=Exported services- imported services.
  • This include the tourist industry.

Visible trade

  • Trade in goods only.
  • calculated in given years..
  • Visible balance=Exported goods-Imported goods.

Trading blocks

  • A group of center that removed trade restrictions between member states in order to facilitate trade.
    Examples( SADC.AU.)
    • To reduce reliance outside the blocks.
    • To promote trade among member states by reducing tariffs.
    • To assist each other economically in times of problems.
    • To mobilize resources together.
    • To bargain as a group with negotiating for financial assistance.

Trade barriers/tarrifs

These are measure taken by the govt to reduce imports.

By: T.Titus Nyakudyara
Twitter: @NyakudyaraTitus

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