Paper 3 · International Trade
A characteristic of home trade, as opposed to foreign trade, is that
Aan import or export licence has to be obtained before goods move
Bgoods travel further, so insurance and transport charges are higher
Cone currency is used throughout, so there is no exchange rate risk
Dbuyers and sellers are governed by two different systems of law
Explanation: Home trade takes place entirely within one country's borders, so both parties use the same money, the same commercial law, the same language and the same weights and measures. There are no customs duties, no licences and no currency conversion to arrange.
Derived from ZIMSEC Economics 4050/3 Paper 3, June 2023, Q3