ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Solution: Local trade, also known as domestic trade, is carried out in cities, towns, and villages. The exchange of goods and services is only allowed within the country.

Detailed explanation-2: -When trade takes between states, cities or villages within a city, it is known as local trade which does not impact the value of the national currency. whereas when trade takes place between two countries, it is known as international trade which impacts the value of national currency.

Detailed explanation-3: -Trade, in general, is of two types. They are Internal trade and International trade.

Detailed explanation-4: -Benefiting business, foreign trade gives firms access to improved capital inputs such as machine, tools, boosting productivity as well. Foreign trade encourages the redistri-bution of labor and capital to relatively more productive sectors.

Detailed explanation-5: -International trade is an exchange involving a good or service conducted between at least two different countries. The exchanges can be imports or exports. An import refers to a good or service brought into the domestic country. An export refers to a good or service sold to a foreign country.