You have already learnt that the human activities engaged in buying and selling of goods and services come under trade. Therefore, trades includes sale, transfer or exchange of goods and services with the intention of earning profit. The objective of trade is to make goods available to those persons who need them and are willing to pay for them. ‘Thus, trade plays ‘a major role in establishing contact between the producers and the consumers and eliminates the hindrance of person.
A person who is engaged in trade is called ‘trader’ or ‘middleman’. Various traders operate in between producers and consumers and remove the hindrance of person. We can classify trade into two broad categories:
I) internal trade, and
2) external trade.