Question 8 of 17intermediate💡 UnderstandShort Answer3 marks

Explain any two business activities which are auxiliaries to trade.

Correct Answer

Activities which are meant for assisting trade are known as auxiliaries to trade. These activities help in removing various hindrances which arise in connection with the production and distribution of goods. Two important auxiliaries to trade are:

Transport: Transport facilitates movement of goods from one place to another. It helps in removing the hindrance of place by making goods available at locations where they are needed. In the absence of transport, it would be difficult for producers to reach out to buyers in different markets.

Banking: Banking provides financial assistance to the manufacturer and trader. It helps in removing the hindrance of finance by providing necessary funds for business operations. Banks facilitate trade by offering various financial services that enable smooth conduct of business activities.

Exercise: EXERCISES - Short Answer Questions | Q: 7 | (Page 23)
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Explanation

The question asks for any two auxiliaries to trade. The textbook clearly lists transport, banking, insurance, warehousing, and advertising as auxiliaries to trade. I have selected transport and banking as they are explicitly explained in the context. Transport removes the hindrance of place, while banking removes the hindrance of finance. Both activities support not only trade but also industry and the entire business activity.