QUIZ:

DEFINITION:
(Internal Trade)
- Internal trade is trade that involves buying and selling taking place between two parties which are
located within the political and geographical boundaries of a country.
(External Trade)
- International trade is referred to as a trade that involves buying and selling of goods between two
individuals or businesses located in two different countries or it can be trade between two or more
different countries.
CURRENCY EXCHANGE:
(Internal Trade)
- There is no exchange of currency as trade takes place within the boundaries of the nation.
- The exchange rate is the price of foreign money in units of domestic money or, under an
alternative definition, the price or value of domestic money in units of foreign money.
(External Trade)
- Exchange of currency is there between the two countries/individuals/businesses involved in the
trade.
- Foreign exchange, or forex, is the conversion of one country's currency into another. In a free
economy, a country's currency is valued according to the laws of supply and demand.
TRADE RESTRICTIONS:
(Internal Trade)
- No trade restrictions for internal trade.
- Free off restriction, so long as it is a legal commodity being traded. Legal and wholesome
commodities dealt with in domestic trade can move around the country without facing any forms
of restrictions such as embargoes, quota system, and tariffs.

(External Trade)
- International trade has different restrictions as the two countries involved in trade have different
policies with regards to trade. Governments three primary means to restrict trade: quota systems;
tariffs; and subsidies
TRANSPORTATION COST:
(Internal Trade)
- Transportation cost is less when trade is taking place within the borders of a country
(External Trade)
- Comparatively higher transportation costs as goods need to be transported across the world.
GOODS TRADED:
(Internal Trade)
- Only those goods and services are traded that are available in the country
(External Trade)
- Helps countries to trade goods that are produced in surplus or purchase goods that are scarcely
available.

FOREIGN RESERVE:
(Internal Trade)
- Does not generate any foreign reserve
(External Trade)
- International trade generates foreign reserves for the two trading countries.