Unit 10: Internal Trade
### 1. What is the primary objective of trade?
- A) Social service
- B) Profit
- C) Export promotion
- D) Cost reduction
- **Answer:** B) Profit
### 2. Which type of trade involves the buying and selling of goods and services within the boundaries of a country?
- A) International trade
- B) Wholesale trade
- C) Internal trade
- D) External trade
- **Answer:** C) Internal trade
### 3. What is the main role of wholesalers in the distribution process?
- A) They buy goods from consumers
- B) They act as intermediaries between manufacturers and retailers
- C) They only sell goods to ultimate consumers
- D) They manufacture goods for resale
- **Answer:** B) They act as intermediaries between manufacturers and retailers
### 4. Which of the following is NOT a characteristic of itinerant retailers?
- A) Operate from a fixed location
- B) Deal with limited resources
- C) Frequently change locations
- D) Focus on consumer goods of daily use
- **Answer:** A) Operate from a fixed location
### 5. Which tax system was implemented in India to unify multiple indirect taxes?
- A) Service Tax
- B) Income Tax
- C) Goods and Services Tax (GST)
- D) Sales Tax
- **Answer:** C) Goods and Services Tax (GST)
### 6. Internal trade is primarily classified into which two types?
- A) Wholesale trade and retail trade
- B) Export trade and import trade
- C) Domestic trade and foreign trade
- D) Primary trade and secondary trade
- **Answer:** A) Wholesale trade and retail trade
### 7. What service do wholesalers provide to manufacturers by bearing risks such as theft, spoilage, and price fluctuations?
- A) Financial assistance
- B) Risk bearing
- C) Market expansion
- D) Customer relationship management
- **Answer:** B) Risk bearing
### 8. Which type of retailer operates from a permanent establishment and does not move from place to place?
- A) Itinerant retailer
- B) Fixed shop retailer
- C) Market trader
- D) Hawker
- **Answer:** B) Fixed shop retailer
### 9. Which of the following is a common example of a fixed shop large-scale retailer?
- A) Peddler
- B) Departmental store
- C) Hawker
- D) Pavement vendor
- **Answer:** B) Departmental store
### 10. Which retailing method uses advertisements, catalogues, and postal services to sell products directly to customers without personal contact?
- A) Departmental stores
- B) Chain stores
- C) Mail order houses
- D) Supermarkets
- **Answer:** C) Mail order houses
### 11. Goods and Services Tax (GST) in India is characterized as a:
- A) Source-based tax
- B) Consumption-based tax
- C) Production-based tax
- D) Export-only tax
- **Answer:** B) Consumption-based tax
### 12. Which of the following is NOT a service provided by retailers to consumers?
- A) Personal selling
- B) Regular availability of products
- C) Storage services for manufacturers
- D) Wide selection of goods
- **Answer:** C) Storage services for manufacturers
### 13. Which type of retailer is typically found at places with high traffic, such as railway stations, and sells items like newspapers and snacks?
- A) Peddlers
- B) Street traders
- C) Market traders
- D) Cheap jacks
- **Answer:** B) Street traders
### 14. What is a unique feature of chain stores or multiple shops?
- A) Each shop has unique merchandise
- B) Shops are centrally located
- C) Uniform pricing policies across all branches
- D) Each branch manager sets their own prices
- **Answer:** C) Uniform pricing policies across all branches
### 15. Which of the following benefits is associated with the Goods and Services Tax (GST)?
- A) Increased number of indirect taxes
- B) Higher costs of goods
- C) Reduction in tax-on-tax effects
- D) Limited access to tax credits for businesses
- **Answer:** C) Reduction in tax-on-tax effects
### 16. Which type of retailer provides goods directly to the ultimate consumers?
- A) Wholesaler
- B) Departmental store
- C) Retailer
- D) Peddler
- **Answer:** C) Retailer
### 17. Which of the following is a characteristic of a departmental store?
- A) It specializes in a single product line
- B) It typically has only one location
- C) It provides a wide variety of goods under one roof
- D) It operates exclusively online
- **Answer:** C) It provides a wide variety of goods under one roof
### 18. What advantage do multiple shops or chain stores offer?
- A) They only serve high-income customers
- B) They eliminate the need for middlemen
- C) They provide significant credit facilities
- D) They do not require inventory management
- **Answer:** B) They eliminate the need for middlemen
### 19. Which type of retailer is known for frequently changing locations to serve customers?
- A) Chain stores
- B) Fixed shop retailers
- C) Itinerant retailers
- D) Departmental stores
- **Answer:** C) Itinerant retailers
### 20. In which retail format do customers typically pick up products on their own and make payments at a centralized counter?
- A) Vending machines
- B) Supermarkets
- C) Specialty shops
- D) Chain stores
- **Answer:** B) Supermarkets
### 21. What type of trade involves buying and selling of goods in large quantities, typically for resale?
- A) Retail trade
- B) Wholesale trade
- C) Foreign trade
- D) Domestic trade
- **Answer:** B) Wholesale trade
### 22. Which type of retailer is ideal for high turnover, standardized products such as branded consumer goods?
- A) Departmental store
- B) Chain store
- C) Second-hand goods shop
- D) General store
- **Answer:** B) Chain store
### 23. Goods and Services Tax (GST) is categorized under which type of tax?
- A) Sales Tax
- B) Value Added Tax
- C) Destination-based consumption tax
- D) Import Duty
- **Answer:** C) Destination-based consumption tax
### 24. In India, which organization is primarily responsible for making recommendations related to GST rules and rates?
- A) National Tax Agency
- B) GST Council
- C) Ministry of Commerce
- D) State Revenue Department
- **Answer:** B) GST Council
### 25. What is a key limitation of a consumer cooperative store?
- A) High level of personal motivation among managers
- B) Dependence on credit-based sales
- C) Lack of professional business training
- D) High inventory costs
- **Answer:** C) Lack of professional business training
### 26. Which type of retailer often provides services such as credit facilities, home delivery, and after-sales support?
- A) Street traders
- B) Departmental stores
- C) Supermarkets
- D) Market traders
- **Answer:** B) Departmental stores
### 27. What is the main goal of anti-profiteering measures under GST?
- A) Increase government revenue from taxes
- B) Reduce consumer prices through fair tax savings
- C) Allow businesses to set prices independently
- D) Enable suppliers to pass on increased costs
- **Answer:** B) Reduce consumer prices through fair tax savings
### 28. Which type of retailer is known for selling non-standardized, often low-value products like fruits, vegetables, and toys?
- A) Cheap jacks
- B) Market traders
- C) Peddlers and hawkers
- D) Departmental stores
- **Answer:** C) Peddlers and hawkers
### 29. Which feature best describes a super market?
- A) High emphasis on personal selling
- B) Low operating costs and credit-based sales
- C) High focus on bulk purchases and self-service
- D) Limited selection of food items only
- **Answer:** C) High focus on bulk purchases and self-service
### 30. What is the primary purpose of Chambers of Commerce in promoting internal trade?
- A) Monitoring employee performance
- B) Providing subsidies to large retailers
- C) Advocating for policies to facilitate trade
- D) Enforcing taxation laws
- **Answer:** C) Advocating for policies to facilitate trade
### 31. Which of the following services is commonly offered by wholesalers to retailers?
- A) Personal selling
- B) Credit facilities
- C) Home delivery of goods
- D) Repair and maintenance
- **Answer:** B) Credit facilities
###32. A consumer cooperative store primarily aims to:
- A) Maximize profit for shareholders
- B) Provide goods at lower prices to its members
- C) Sell luxury goods to exclusive customers
- D) Compete directly with international retailers
- **Answer:** B) Provide goods at lower prices to its members
### 33. What is the primary feature of a vending machine as a retail method?
- A) It requires direct human interaction for purchases
- B) It sells a wide range of products like a department store
- C) It allows cashless and unattended purchases
- D) It provides credit options for large purchases
- **Answer:** C) It allows cashless and unattended purchases
### 34. Which type of tax has been replaced by the Goods and Services Tax (GST) in India?
- A) Direct income taxes
- B) Import tariffs
- C) Multiple indirect taxes at state and central levels
- D) Property taxes
- **Answer:** C) Multiple indirect taxes at state and central levels
### 35. What type of retail store is known for offering a very limited selection of goods, often targeting a specific market segment or product line?
- A) Supermarket
- B) General store
- C) Speciality shop
- D) Chain store
- **Answer:** C) Speciality shop
### 36. Which of the following best describes the role of “Market Traders”?
- A) They sell only luxury items in malls
- B) They operate from fixed shops in shopping complexes
- C) They set up stalls on fixed days in specific places
- D) They specialize in selling imported goods
- **Answer:** C) They set up stalls on fixed days in specific places
### 37. Which retail format often provides the service of collecting market information directly from consumers?
- A) Wholesalers
- B) Retailers
- C) Importers
- D) Vending machines
- **Answer:** B) Retailers
### 38. Which one of the following is a major limitation of operating multiple shops or chain stores?
- A) High risk of bad debt
- B) Difficulty in transferring stock across locations
- C) Lack of flexibility to adjust to changing demands
- D) Increased need for personal selling
- **Answer:** C) Lack of flexibility to adjust to changing demands
### 39. The “Cost, Insurance, and Freight” (CIF) term in trade means:
- A) Seller pays for cost, insurance, and freight charges to the buyer’s location
- B) Buyer bears all costs including insurance
- C) Goods are delivered free of cost to the buyer
- D) Only insurance is covered by the seller
- **Answer:** A) Seller pays for cost, insurance, and freight charges to the buyer’s location
### 40. In a department store, the primary advantage for customers is:
- A) Access to high-quality products only
- B) Availability of all goods under one roof
- C) Exclusivity in pricing
- D) Limited services and low customer interaction
- **Answer:** B) Availability of all goods under one roof
### 41. Which type of retailer is generally the final link in the distribution chain, selling directly to consumers?
- A) Wholesaler
- B) Retailer
- C) Importer
- D) Supplier
- **Answer:** B) Retailer
### 42. What is a main benefit of GST for consumers?
- A) Uniform pricing across states
- B) Increased number of indirect taxes
- C) Reduced transparency in taxation
- D) Multiple tax filings
- **Answer:** A) Uniform pricing across states
### 43. Which service is typically offered by departmental stores but not by supermarkets?
- A) Self-service
- B) After-sales support
- C) Cash-only transactions
- D) Limited product selection
- **Answer:** B) After-sales support
### 44. A primary advantage of mail-order houses is:
- A) Direct personal contact with customers
- B) High customer loyalty
- C) No need for a physical retail location
- D) Extended credit facilities for all customers
- **Answer:** C) No need for a physical retail location
### 45. In terms of “destination-based consumption tax,” which tax applies in India?
- A) Import Duty
- B) Income Tax
- C) Goods and Services Tax (GST)
- D) Service Tax
- **Answer:** C) Goods and Services Tax (GST)
### 46. What type of retailers are generally located in busy streets or shopping areas, selling items like newspapers, magazines, and snacks?
- A) Departmental stores
- B) Chain stores
- C) Street stall holders
- D) Supermarkets
- **Answer:** C) Street stall holders
### 47. Which of the following terms refers to the system where goods are delivered and payment is collected only upon delivery?
- A) Free on Rail (FOR)
- B) Cash on Delivery (COD)
- C) Errors and Omissions Excepted (E&OE)
- D) Cost, Insurance, and Freight (CIF)
- **Answer:** B) Cash on Delivery (COD)
### 48. In which type of store would you typically find departments for toiletries, electronics, groceries, and clothing all under one roof?
- A) General store
- B) Departmental store
- C) Chain store
- D) Supermarket
- **Answer:** B) Departmental store
### 49. Which form of trade specifically involves the buying and selling of goods in small quantities directly to consumers?
- A) Wholesale trade
- B) Foreign trade
- C) Retail trade
- D) Internal trade
- **Answer:** C) Retail trade
### 50. What is one primary advantage of a consumer cooperative store?
- A) High-profit margins for investors
- B) Ability to avoid all middlemen
- C) Democratic management and decision-making
- D) Large-scale production facilities
- **Answer:** C) Democratic management and decision-making
### 51. What kind of retailer provides a wide selection of products, operates on self-service, and is usually centrally located for high turnover?
- A) Specialty shop
- B) General store
- C) Supermarket
- D) Chain store
- **Answer:** C) Supermarket
### 52. The Goods and Services Tax (GST) has been beneficial in India primarily because it:
- A) Increased the number of indirect taxes
- B) Made India a unified market for goods and services
- C) Is based on the source of production
- D) Applies only to luxury items
- **Answer:** B) Made India a unified market for goods and services
### 53. Which type of retailer typically stocks a variety of products, often in small quantities, to satisfy everyday needs in local neighborhoods?
- A) Departmental stores
- B) General stores
- C) Chain stores
- D) Mail-order houses
- **Answer:** B) General stores
### 54. Which of the following best describes the role of Chambers of Commerce in internal trade?
- A) Monitoring consumer spending
- B) Advocating for smooth interstate movement of goods
- C) Determining prices for local goods
- D) Enforcing international trade laws
- **Answer:** B) Advocating for smooth interstate movement of goods
### 55. What is a major drawback of using vending machines for retail sales?
- A) High level of personal attention
- B) Limited access to high-priced items
- C) High maintenance and repair costs
- D) Extensive credit facilities offered
- **Answer:** C) High maintenance and repair costs
### 56. Which type of store specializes in a narrow product range, such as children’s toys or women’s shoes?
- A) General store
- B) Departmental store
- C) Speciality shop
- D) Chain store
- **Answer:** C) Speciality shop
### 57. A key characteristic of chain stores is that they:
- A) Are centrally located in one city
- B) Operate independently of each other
- C) Have uniform pricing policies across all outlets
- D) Sell a variety of unbranded goods
- **Answer:** C) Have uniform pricing policies across all outlets
### 58. Which is a limitation associated with mail-order retailing?
- A) High level of customer interaction
- B) Limited reach due to postal service dependence
- C) Wide selection of perishable goods
- D) Extensive credit options for buyers
- **Answer:** B) Limited reach due to postal service dependence
### 59. The term "Errors and Omissions Excepted (E&OE)" in trade refers to:
- A) Conditions for credit sales
- B) Exclusion of middlemen costs
- C) Allowance for potential mistakes in documentation
- D) Tax exemptions on import goods
- **Answer:** C) Allowance for potential mistakes in documentation
### 60. What type of retailer typically moves from location to location to reach customers directly, often without a fixed place of business?
- A) Departmental store
- B) Itinerant retailer
- C) Chain store
- D) Vending machine operator
- **Answer:** B) Itinerant retailer
