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Lesson Trade
8.5

FACTS US exports of goods and services reached nearly
to Understand $2.23 trillion in 2015. In other words, American
workers, farmers and companies can compete and
win in the world economy.

The activity of buying and selling goods
and services is called Trade. It is also
known for the commercial transaction
that involves the export and import
of goods and services. Through the
wholesalers and retailers the produced
goods are reached to the consumers.
The trade is classified into internal
trade and external or foreign trade.

Types of Trade

There are two types of trade. They are
i. Internal or Domestic Trade

ii. External or Foreign Trade

i. Internal or Domestic Trade

The buying or selling of goods, services
and raw materials within the country is called
internal trade. The goods that are manufactured
within the country and imported from the other
country are used in internal or domestic trade.

ii. External or Foreign Trade

The buying or selling of goods, services and raw materials with two countries is
called foreign or external trade. A country buys the products from the other countries
which are not produced in the country. Similarly, the surplus amounts of goods are
exported to the other countries. Therefore, the external trade practices localization
and globalization. In other words, globalization means the exporting the local products
and making them globalized.

External trade is highly beneficial than the internal trade because it helps to earn
foreign currency. It increases job opportunities and enhances the living standard

301 Dynamic Social Studies - Book IX