Understanding Business, Trade, and Transportation

Business and Trade

Business consists of buying and selling goods to satisfy the needs of the population, performed by exchanging products for other products (barter).

Domestic Trade

Occurs within a country:

• Wholesale: Wholesalers buy large quantities of goods and sell them to other traders or companies.
• Retail: It sells directly to the public in small quantities.

International Trade

What a country conducts with other countries, including both exports and imports. It is collected in the trade balance and the balance of payments.

• Trade Balance: The difference between what a country sells goods abroad and what it buys from other countries.
• Balance of Payments: Records all economic exchanges of a country, both material goods, services, or financial.
  • When income exceeds expenditure, it is said that there is a surplus.
  • When incomes are lower than states, there is a deficit.

Characteristics of Trade Now

• Huge quantities of very different products.
• Powerful and effective means of transport.
• Network of relationships globally.
• Employs many people.
• Presence of small companies.

Trade Flows

• Raw Materials: They are basically in international trade because the producing countries are not always great consumers of extracted raw materials, but if they sell them. (The most important commodity in world trade is oil).
• Manufactured Goods: They are key to the flow of industrialized countries.
• Capital: Huge quantities of money constantly circulate around the world.
• Information: With the appearance and generalization of information and communication technologies, news and knowledge can immediately expand around the world.

Trading Blocs

They have in common: spatial proximity, customs union, industrial reassignment, and a common front of efforts.

Transportation

Transportation is the activity whereby a person or commodity moves from one place to another. Features: Allows everyday displacement of the population, enabling travel to remote places, and makes possible the distribution of goods and services.

Transport Networks

Set of infrastructures where vehicles can move easily. Formed by axes.

• Land: A dense network formed by infrastructures worldwide.
  • Road: The most used to transport people or goods.
  • Rail: Optimal for medium and long travel distances.
• Air: The most suitable for moving people long distances and for transporting light goods.
• Maritime: The best way to move heavy goods a considerable distance. One disadvantage is that it is very slow.