EVOLUTION AND GROUTH OF COMMERCE
I Fill in the blanks with appropriate words in the following sentences:
1.The economic activity that provides technical or specialized personal services to the consumers is called ________
2.In olden days the goods were exchanged for goods, which were called ________ system of exchange.
3.The full responsibility of paper money vests with ______
4.The emergence of communities and villages took place during ______________ stage.
5.The main cause for International trade was _________
6.Trade and commerce contribute to the economic development of a country by paying __________ and ___________ to the government.
Ans: (1) profession (2) barter (3) Central Bank (4) agricultural
(5) geographical discovery (6) rates, taxes, duties.
II. Answer each of the following questions in 2 or 3 sentences:
1.What is an economic activity?
Ans: We need goods and services to satisfy our needs. Goods are produced by agriculture and industry. We require services too. The activities which are concerned with the production and exchange of goods and services are called economic activities.
2.Give the meaning of trade and Commerce.
Ans: Trade is the buying and selling of goods. On the other hand commerce includes trade and aids to trade or auxiliaries to trade. The aids to trade include transport, banks, warehouses, advertisement agencies, insurance, etc.
3.What is meant by Barter system of exchange?
Ans: In the early period of trade, barter system was followed. The goods produced were directly exchanged. The direct exchange of goods for goods or other things is called barter system of exchange.
4.What is a profession?
Ans: Profession is mainly concerned with rendering of specialized technical and personal services. Eg, lawyers, doctors, chartered accountants, etc.
5.'What are aids to trade? Name them.
Ans: Commerce includes trade and aids to trade or auxiliaries to trade. These aids include transport, banks, warehouse facilities, advertisement agencies, insurance, etc.
6. What are craft guilds?
Ans: A body of professional craftsmen such as carpenters,
blacksmiths, weavers, builders came into existence. These professional groups formed the craft guilds. They carried on the production of goods in their houses and supplied to the agriculturists.
III. Answer each of the following questions in a paragraph:
1.How do production and exchange playa very important
role in our daily life?
Ans: The distribution of goods and services is called exchange. Exchange is the connecting link between production and
consumption. The goods produced at a place have to reach consumers at different places. During the course of production, the producers take into consideration, the market study, transportation, storage of goods, determination of price, advertisement, etc. All these aspects are included in the process of exchange of goods and services. The exchange system has become the foundation for business.
2.Explain the different types of economic activities.
Ans: Economic activities are broadly classified into three types. They are - (1) Business, (2) Profession and (3) Employment.
(1) Business- it is mainly concerned with production and
exchange of goods and services.
(2) Profession- it is mainly concerned with rendering of
specialized technical and personal services. Example-
lawyers, doctors, chartered accountants, etc.
(3) Employment- it is the work undertaken by the people
under an employer for salary or wages. Example-agriculture labourers, industrial labourers.
3.What are the difficulties of Barter system of exchange? How has money solved these problems?
Ans: The important problems of barter system of exchange are
(1) Lack of double co-incidence of wants-when two parties exchange goods with each other.
(2) Lack of common measure of value-it is very difficult to
decide the quantity of one commodity to another. E.g.- for one cow how many sheep to be exchanged.
(3) Difficulty of sub-division-it was very difficult to divide
some animals or things.
(4) Difficulty to store the goods or to transport-movement of goods from one place to another.
Money has solved the problem of barter system. Paper money is a token which generally comprises of bank notes issued by the central bank of the country.
4.Which are the important stages of economic evolution? Briefly explain anyone.
Ans: The important stages of economic evolution are as follows:
(1) Hunting and fishing stage,
(2) Pastoral stage,
(3) Agricultural stage,
(4) Handicraft stage,
(5) Barter system stage,
(6) Money Economy stage,
(7) Town Economy stage and
(8) International Trade stage.
(1) Hunting and fishing stage: It was the earliest human civilization. During this stage man was a wanderer. He moved in groups from one place to another in search of food. Man hunted animals for food. No economic activity existed during this stage.