Question

Distinguish between internal and international trade

Answer 1

	Domestic Business	International Business
1. Meaning	Domestic business refers to business transactions transacted within the geographical boundaries of a country	International Business refers to the business transaction transacted in beyond the boundaries of a country
2. Participants in Business	People/organizations within the country participate in business activities	People/organizations outside the country participate in business activities
3. Mobility of factors of Producation	The factors of production i.e. labour,capital,technology,material,etc.,move across the boundaries of the country	The factors of production i.e. labour,capital,technology,material,etc.,move freely within the boundaries of the country
4. Nature of consumers	Consumers are relatively homogenous in nature in terms of culture, behavior, taste, preferences, legal system, customs and practice, etc.,	Consumers are relatively heterogeneous in nature in terms of culture, behavior, taste, preferences, legal system, customs and practices, etc., prevailing across the countries.
5. Business System	Domestic Business is governed by the rules, laws, policies taxtation system of a single country	International Business is governed by the rules, laws, policies, tariffs and quotas etc., system of a multiple countries
6. Currency Used	Domestic business transactions are settled by local currency of a country.	International Business transactions are settled by foreign currencies
7. Mode of Transport	The goods involved in domestic business are mainly transported by roadways and railways	The goods involved in international business are mainly transported by water and airways
8. Risk Exposure	The risks involved in domestic business are relatively less.	The risk involved in international business are more due to distance, difference in socio-economic and political conditions change in foreign exchange value etc.,
9. Scope of Market	The scope of market is limited to national boundaries of a country	The scope of international business is very wide and extends beyond the frontiers of a country
10. Payment of excise duty	Payment of excise duty involves simple procedures and its relatively low in domestic trade	The Process of Payment of excise complicated in international business and the rate of excise duty is relatively high.