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ZIMSEC O Level Commerce Notes: Differences between Home and International trade
- Home trade is buying is the buying and selling of goods and services between people within a country’s borders ( Zimbabwe).
- International trade involves the buying and selling of goods between people in one country (Zimbabwe) and those in other countries.
| Home Trade | Foreign Trade |
|---|---|
| Trade is among citizens of the same country | Trade is between citizens of different countries |
| Short distances are involved for example Harare to Bulawayo | Long distances are involved for example Harare and Beijing |
| Fewer middlemen if any are involved | More middlemen are involved |
| No/Less tariffs ( in the form of levies and taxes) may be charged since there is less state involvement | More tariffs are charged because the government may levy customs duties or trade embargoes. |
| Less transit risks are involved e.g. theft through piracy hence the insurance costs are lower | More risks are involved on the way resulting in higher insurance costs |
| Local currency is used by citizens within the same country e.g. Zimbabwean dollar. | Foreign currencies are used for example the US dollar for oil and the Euro in Europe |
| Citizens normally speak the same local language or official language | Citizens of different countries speak different official languages |
| Costs incurred in transporting goods locally are usually lower | Costs incurred in transporting goods across borders are higher. |
| Documents used are fewer e.g. invoices and quotations | A lot of documents are involved |
| Involves retail and wholesale trade | Involves import and export trade |
| Uses the same units for weighing and measuring products | Uses different units for measuring products for example Zimbabwe uses liters and the US uses gallons and quarts |
To access more topics go to the Commerce Notes page.
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