Trade

Exchange of goods and services / From Wikipedia, the free encyclopedia

Dear Wikiwand AI, let's keep it short by simply answering these key questions:

Can you list the top facts and stats about Trade?

Summarize this article for a 10 year old

SHOW ALL QUESTIONS

Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market.

Kaufmann-1568.png
Two traders in 16th century Germany
MercadodeSanJuandeDios.jpg
The San Juan de Dios Market in Guadalajara, Jalisco
Earle%2C_Liberty_to_Trade_as_Buttressed_by_National_Law%2C_1909_Title.jpg
The Liberty to Trade as Buttressed by National Law (1909) by George Howard Earle, Jr.

An early form of trade, barter, saw the direct exchange of goods and services for other goods and services,[1] i.e. trading things without the use of money.[1] Modern traders 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 letters of credit, paper money, and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade involving more than two traders is called multilateral trade.

In one modern view, trade exists due to specialization and the division of labor, a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trade for other products and needs.[2] Trade exists between regions because different regions may have a comparative advantage (perceived or real) in the production of some trade-able commodity  including the production of scarce or limited natural resources elsewhere. For example, different regions' sizes may encourage mass production. In such circumstances, trading at market price between locations can benefit both locations. Different types of traders may specialize in trading different kinds of goods; for example, the spice trade and grain trade have both historically been important in the development of a global, international economy.

A picture of a busy market in Mile 12. Lagos - Nigeria
A busy market in Mile 12. Lagos - Nigeria

Retail trade consists of the sale of goods or merchandise from a very fixed location[3] (such as a department store, boutique, or kiosk), online or by mail, in small or individual lots for direct consumption or use by the purchaser.[4] Wholesale trade is the traffic in goods that are sold as merchandise to retailers, industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services.

Historically, openness to free trade substantially increased in some areas from 1815 until the outbreak of World War I in 1914. Trade openness increased again during the 1920s but collapsed (in particular in Europe and North America) during the Great Depression of the 1930s. Trade openness increased substantially again from the 1950s onward (albeit with a slowdown during the oil crisis of the 1970s). Economists and economic historians contend that current levels of trade openness are the highest they have ever been.[5][6][7]

Oops something went wrong: