Aid To Trade JSS1 Business Studies Lesson Note

TOPIC: AID TO TRADE 

MEANING OF AIDS TO TRADE

By the expression “Aids to Trade” we mean those things or agents that make trade grow. The aids to trade make trade easy and for this reason, they are called aids to trade, factors of trade, or auxiliary to trade.

 THE AIDS TO TRADE

These aids to trade are:

1.         Insurance
2.         Banking 
3.         Transportation 
4.         Warehousing
5.         Advertising 
6.         Communication and
7.         Tourism

 FUNCTION OF AIDS TO TRADE 

The functions of the above aids to trade are as follows:

•             Insurance: insurance covers risks. It is an aid to trade because it encourages businessmen to take risky business ventures.
•             Banking: the two main functions of a bank are to save money and lend money. This money accepted and saved for customers are lent to businesses as capital. In this way, the bank is an aid to trade.
•             Transportation: transport helps trade by moving goods from one place to another. For example, it moves goods from where they are surplus to where they are scarce. 

EVALUATION 

•             What is the importance of transportation in business?
•             How can insurance serve as an aid to trade?

•             Warehousing: this is concerned with storing goods in safe condition until they are demanded. Therefore, warehousing prevents the scarcity of goods.
•             Advertising: this is the activity that is concerned with informing members of society that a particular good or service exists, its quality, and function. Advertising is an aid to trade because it creates an awareness and demand for goods and services.
•             Communication: this is a form of interaction (i.e. discussion), letter, telephone, etc between buyers and sellers to sell or buy. An example is a letter of  enquiry about the goods available in the warehouse 
•             Tourism: this covers all the activities that make someone on tour comfortable examples of activities under tourism are good hotel accommodations, tourist centers, etc. Tourism assists trade because tourists from foreign countries bring foreign currency into the economy  

EVALUATION  

1.         What do you understand by “aids to trade”?
2.         List the aids to trade you know 

READING ASSIGNMENT 

Business Studies for J.S.S1 by O.A. Lawal and other pages 15-16 

 WEEKEND ASSIGNMENT 

1.         The following are an aid to trade except (a) advertising (b) insurance (c) banking (d) Manufacturing
2.         Aids to trade can also be called (a) auxiliary to trade (b) friends of trade (c) foreign trade (d) home trade 
3.         Banking is an aid to trade because (a) it keeps a lot of money (b) bank managers are in commercial occupations (c) many banks work on Saturday (d) it can save and lend money to various traders 
4.           Warehouses are useful to trade because (a) it is a means of keeping goods until they are demanded (b) they cause scarcity of goods (c) they can lead to inflation (d) they move goods from one place to another 
5.         Insurance is useful to trade because (a) it links buyers and sellers together (b) it moves goods from the point of production to where they are demanded (c) it prevents scarcity (d) it encourages businessmen to undertake risky business 

THEORY

1.         List the seven aids to trade.
2.         Explain two of the aids listed in question one above 

REVISION/EVALUATION QUESTIONS 

1.         What is trade?
2.         Who is a trader?
3.         Draw the division of trade 
4.         What is home trade?
5. Mention traders who are involved in home trade