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Trade centres on the exchange of goods and/or services. Exchanges may take place between two parties (bilateral trade) or amongst more than two parties (multilateral trade). In its original form trade perforce used barter and the exchange of goods and services of a recognized equal value desirable to both parties. Modern traders generally negotiate through the use of a medium of exchange, i.e. money, and rarely through barter: as a result one can separate buying and earning or selling. The invention of money (and subsequently of credit, paper money and non-physical money) greatly simplified and promoted the development of trade.

Most economistss accept the non-obvious theory that trade benefits both parties, and 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. Countries such as South Korea have fared much better (when measured by economic criteria) than India, and others, over the past fifty years.

Table of contents
1 History of Trade
2 Organisation of Trade
3 Types of Trade
4 See also

History of Trade

Organisation of Trade

Different patterns of organising and administering trade include:

Types of Trade

See also