Observation

Most candidates who attempted this question performed very well. However some of them could not differentiate between bilateral and multilateral trade. The expected responses to the question include:
2a

Features of the underlisted retail outlets

i. Shopping mall

• Occupies large shop space.

• Sells wide range of goods.

• Provides one stop shopping.

• Provides parking space for customers.

• Shops are under the same roof.

• Shops are owned and operated by individual traders independently.

• There is always 100% power back-up.

• Goods are tagged with prices and displayed in open shelves.

• Trolleys and baskets are provided for customers.

• Goods are sold on self-service basis.

• Check out points are provided for payment.

ii. Mail order business

• Delivery is done by post/courier service.

• Uses catalogues to advertise products.

• Delivers goods to customers’ door steps.

• Requires a warehouse and small office for administrative work.

• Terms of sale are either cash on delivery or cash with order.

• Does not make use of middlemen.

• Requires intensive advertising.

iii. Tied shop

• Owner is a manufacturer’s representative.

• Sells one line of product.

• Enjoys sponsorship and support from manufacturers.

• They are part of chain stores.

iv. Vending machine

• Ensures automatic sale of products through machines.

• Mostly sells food items.

• Normally located in secured busy shopping centres.

• It is a coin operated machine.

• Operated through self-service.

• Operated twenty-four hours.

2(b) Explanation of the following terms as used in international trade

i. Bilateral agreement

It is a trade deal between two countries to exchange goods and services with each other where the countries may reduce or eliminate import quotas and other trade barriers to encourage trade and investment.

ii. Multilateral agreement

This is an agreement between three or more countries with a mutual consent to engage in trade.

iii. Tariff

This is a tax or duty imposed on imports and exports by the government of a country.

iv. Letter of hypothecation

This is an authority document given to a banker/ lender by to sell the goods warehoused where the loan given against the goods is not paid within the stipulated period.