Commercial Applications
An insurance company compensating a trader for loss due to fire is an example of removing the hindrance of finance.
- True
- False
Answer
False
Reason — An insurance company compensating a trader for loss due to fire is an example of removing the hindrance of risk, not finance. Insurance covers risks of uncertain losses such as fire, theft, accidents, and natural calamities. The hindrance of finance is removed by banking, which provides loans, credit, and payment services to traders.
Related Questions
A textile company produces cotton fabrics and sells them to wholesalers who distribute the goods to retailers across the country. The company also advertises its products to create brand awareness. What hindrance does advertising primarily aim to remove in this case?
- Hindrance of place
- Hindrance of knowledge
- Hindrance of finance
- Hindrance of risk
An entrepreneur faces financial losses due to a natural disaster that damages their inventory. Which auxiliary to trade could have mitigated this loss?
- Transportation
- Warehousing
- Insurance
- Banking
Identify the type of industry shown in the given image.
- Genetic Industry
- Extractive Industry
- Analytical Industry
- Synthetical Industry
Which of the following correctly represents the interdependence of industry, commerce, and trade?
- Commerce is independent of industry, while trade depends on industry.
- Industry creates goods, commerce distributes them, and trade facilitates their exchange.
- Trade relies on commerce, but industry operates independently.
- Industry creates form utility, while trade creates time utility and commerce creates possession utility.