How does auxiliaries to trade help in the removal of hindrances in the process of exchange?
Answers
Answer:
Auxiliaries to trade help in the removal of hindrances in the process of exchange:-
- Activities which are meant for assisting trade are known as auxiliaries to trade. They are generally known as 'Services' since they play a supporting role for the industry and trade to happen.
- The auxiliaries help in removing the various hindrances which arise in connection with production, distribution and sale of goods.
- The hindrances may be in respect of persons, place, time, risk, finance, etc.
- For example, transport removes the hindrances of place by moving goods from the places of production to the markets for sale, storage and warehousing activities removes the hindrance of time by facilitating holding of stocks of goods to be sold as and when required.
- This is how Auxiliaries facilitate movement, storage, financing, risk coverage and sales promotion of goods.
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Explanation:
1. Activities which are meant for assisting trade are known as auxiliaries to trade. They are generally known as 'Services' since they play a supporting role for the industry and trade to happen.
2. The auxiliaries help in removing the various hindrances which arise in connection with production, distribution and sale of goods. The hindrances may be in respect of persons, place, time, risk, finance, etc.
3. For example, transport removes the hindrances of place by moving goods from the places of production to the markets for sale, storage and warehousing activities removes the hindrance of time by facilitating holding of stocks of goods to be sold as and when required.
4. Goods held in stock as well as goods in course of transport are subject to the risk of loss or damage due to theft, fire, accidents, etc. Hence insurance and banking provide risk cover or capital for business to continue.
5. This is how Auxiliaries facilitate movement, storage, financing, risk coverage and sales promotion of goods.