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.