Trade
Trade also called goods exchange economy is the transfer of ownership of goods from one person or entity to another by getting something in exchange from the buyer. Trade is sometimes loosely called commerce or financial transaction or barter. A network 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, 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.
Below are listed some key feautures of the global distribution of trade:
Below are listed some key feautures of the global distribution of trade:
- Trade volume is expaning. More countries are exploiting their resources and selling them on the world market or producing goods that are in global demand
- Visible trading (trading in resources and products) is dominated by the north (please see previous blog post regarding the north south divide). However favourable trade balances are not exclusive to it (exports exceeding imports).
- The pattern of world trade is influenced by three trading blocs, The Global Triad
- There is a rise in invible trading (services) which makes a large component of global trade
- Trade is made up largely of two-way flows of goods and services, the flows between two countries are rarely evenly balances