Web Definition: Purchasing
Trade centers on the exchange of goods and/or services. Exchanges may take place between two parties or amongst more than two parties. In its original form trade necessarily used barter & the exchange of goods & services & recognized equal value desirable to both parties. Modern traders generally negotiate through the use of a medium of exchange, ie as a result one can separate buying & earning from selling. The invention of money greatly simplified & promoted the development of trade. Most economists accept the non-obvious theory that trade benefits both parties & reject the notion that all exchange must exploit one party. Trade exists largely because differences exist in the cost of production of some tradable commodity in different locations. As such, exchange at market prices between locations benefits both. Empirical evidence for the success of trade can emerge when contrasting countries such as South Korea, which has adopted largely unfettered free-trade, with India, which has pursued a more protectionist policy.
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