NATIONAL ECONOMY

National Economy can be defined as a nations financial resources and its financial managements with a view towards its production. It consist of economic agencies that takes part in production, exchange, distribution and consumption.

ECONOMIC ACTIVITIES

Examples of economic activities as trade.

Trading: it is an act of buying and selling of goods and services

Trade can be divided into two (i) Home trade (ii) Foreign trade

TRADE

Home Trade Foreign Trade

Wholesale trade Retail trade

Import Export

Home Trade

This is the trade which operates within a country. It can also be referred to as internal trade. This trade can be practised into two ways which are (i) Wholesales trade and (ii) Retail trade.

Wholesale Trade

This involves buying of goods in large quantities from the produces and sell directly to the retailers or consumers.

The wholesaler is a trader that buys goods and sell out in large quantities.

FUNCTIONS OF WHOLESALER

He finance the producers
Re – brands the goods
Speeds up production process
Assists the producers in advertising their products
He also give information to the producers about the market
He borrow retailers money
He gives goods or credits to retailers.

RETAIL TRADE

This is the type of trade that involves sales of goods in small quantity. Retailer is a trader that buys goods in smaller quantity from the wholesaler and sells it in bits to the final consumer.

FUNCTIONS OF A RETAILER

He sells in bits to the final consumer
He proves information about the market to the wholesaler
The retailer is a link between the wholesaler and consumer
He provides after sale services
He gives credit facilities to the trusted consumer.

FOREIGN TRADE

This can be referred to as the trade across border. It is the trade between nations. E.g. Trade between Nigeria and United State of America (USA), Nigeria and Europe. Foreign trade can be divided into two.

Import trade
Export trade

IMPORT TRADE

It is the trade that involves movement of goods from one country into another. E.g. movement of electronics from Japan to Nigeria.

EXPORT TRADE

This is the movement of goods produced in the country to the other country that lacks the product of goods. e.g. The movement of cocoa, coffee to other part of country (USA, France Etc.)

Importance of Foreign Trade

It provides employment opportunity for people
It makes goods available in those area/country that doesn’t produce that kind of goods
It improves people skilfulness
It promotes peace and unity among nations
It encourages economy development
It gives room for a close relationship of nations
It increase the standard of people.

Problems Of Foreign Trade

Language Barrier
Currency problem of difference
The policies of government in different countries
Document accusation problem
Impossition of tarrif

Solution to the problem of international Trade

Political stability
There should be reduction in tarrifs
The currency exchange rate should be regulated
Transport network should be improved
Loan should be granted to facilities trade
Government policies should encourage foreign trade
Production of goods and services should be increased
Countrys should sign treaties and peace accord/agreement.