Topics in CommerceForeign Trade: Importance, Advantages and Disadvantages of Foreign Trade Foreign Trade - Types and Divisions of Foreign Trade Scheme of Work for Commerce, SS1, First Term Scheme of work for Commerce, SS1, Second Term Scheme of work for Commerce, SS1, Third Term Division of Labour - Conditions necessary for Division of Labour Forms, Advantages and Disadvantages of Division of Labour Balance of Trade and Balance of Payments Production - Definitions, Examples and Types of Production Deferred payment and its benefits Commodity Market, Types and Importance of Commodity Market Marketing: The Four P's of Marketing and Branches of Marketing Meaning, Scope, Functions and Characteristics of commerce
Academic Questions in Commerce
The followings are advantages of division of labour EXCEPT _____.
Which of the following statement is incorrect concerning division of labour?
What does a bearer cheque mean?
What is an order cheque?
Your country does business with other countries. As an instance, Nigeria does business with China. Lots of goods are imported into Nigeria from China. On the other hand, Nigeria is also a major exporter of oil to other countries of the world.
Simply put; Balance of Trade deals with the import and export of goods only.
Balance of Trade can be defined as the total value of goods imported and exported by a country during a specific period; usually yearly or annually.
A country is said to have reached a balance of trade when the money generated from the exportation of goods equals that from the importation of goods.
Balance of trade can be either positive, negative or zero
It is noteworthy that balance of trade has nothing to do with services.
The import and export of services is NOT a concept of balance of trade.
The idea behind the balance of payments is broader when compared to balance of trade. In fact, balance of trade is only one aspect of balance of payments.
Other aspects or components of balance of payments are:
By definition, Balance of Payments is the record showing the relationship between a country’s total payment made to other countries and the total money received by them from other countries within a time period.
The Balance of Payments is a guide that tells a country whether it has enough savings to pay for all its imports. It will also show the amount of economic output produced by a country.
Note: A balance of payments can be in the surplus or deficit direction.
Balance of Payments Deficit implies that a country imports more goods, services and capital compared to its exports. As a result, such countries will have to borrow from other countries, IMF (International Monetary Fund) or World Bank to pay for its imports.
A continual balance of payment deficit will make a country end up as a consumer nation. With time, such countries will become debtors to other countries or international banks. This is not the ideal way to go for any country since their creditors may eventually seize their assets; and such asset could be the country’s natural resources.
Balance of Payment Deficit is also called Unfavorable Balance of Payments or Deficit Balance of Payments.
Balance of Payment Surplus implies that the country exports more goods, services and capital when compared to its imports.
This is the ideal way to go because such country will have enough capital to support its local or domestic production; simultaneously increasing job opportunities within it.
In a country with a "balance of payment surplus", the citizens are gainfully employed; and these countries are generally lenders to other nations.
Balance of Payments Surplus is also called Favorable Balance of Payments or Surplus Balance of Payments.
Below are some important points to note with regards to Balance of Payments:
Capital movement in the form of investments and loans are all included here.
Balance of Trade
Balance of Payments
It is the total value of goods imported and exported by a country during a specific period; usually yearly or annually
It is the record showing the relationship between a country’s total payment made to other countries and the total money received by them from other countries within a time period
It helps a country evaluate its net profit and net loss incurred only from the importation and exportation of goods
It gives us a proper accountability beyond the importation and exportation of goods
Unilateral and Capital transfers are not part of balance of trade
Unilateral and Capital transfers are part of balance of payments
It deals with the difference between the export and import of goods only
It deals with the differences between the inflow and outflow of foreign exchange
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Alfred Ajibola is a Medical Biochemist, a passionate Academician with over 7 years of experience, a Versatile Writer, a Web Developer, a Cisco Certified Network Associate and a Cisco CyberOps Associate.
Amazing facts in Commerce
Amazon is an e-commerce website launched in 1995. It did not make any profit for its first seven years.
Amazon's first profit was in 2003. Its founder "Jeff Bezos" is the richest man in the world as at 2018/2019
NOTABLE POINTS IN Commerce
Commerce can be defined as the exchange of goods and services, usually for money and on a large scale that will require the transportation of such goods and services.
Commerce is very important to the life of any Nation for the following reasons:
A public company is not owned by an individual. Usually, it is owned by groups or a very large number of people.
The shares of a public company are traded freely on the stock exchange.
Below are some features of a public company
The four elements of the marketing mix are usually referred to as the 4 “P”. These are:
Think of marketing mix as the set of marketing tools that an industry or company uses to drive or accomplish its marketing objectives in the target market