Geography favoured the Muslim Empire, which spread between the trading zones of the Indian Ocean and the Mediterranean. Explain.

1. Political unification and urban demand for foodstuffs and luxuries enlarged the circuit of exchange. Geography favoured the Muslim Empire, which spread between the trading zones of the Indian Ocean and the Mediterranean.
For five centuries, Arab and Iranian traders monopolised the maritime trade between China, India and Europe. This trade passed through two major routes, namely, the Red Sea and the Persian Gulf. High-value goods suitable for long-distance trade, such as spices, textile, porcelain and gunpowder, were shipped from India and China to the Red Sea ports of Aden and Aydhab and the Gulf ports of Siraf and Basra.
From here, the merchandise was carried overland in camel caravans to the warehouses (makhazin, origin of the word magazine which has a similar collection of articles) of Baghdad, Damascus and Aleppo for local consumption or onward transmission.
The caravans passing through Mecca got bigger whenever the hajj coincided with the sailing seasons (mawasim, origin of the word monsoon) in the Indian Ocean.
At the Mediterranean end of these trade routes, exports to Europe from the port of Alexandria were handled by Jewish merchants, some of whom traded directly with India, as can be seen from their letters preserved in the Geniza collection.
However, from the tenth century, the Red Sea route gained greater importance due to the rise of Cairo as a centre of commerce and power and growing demand for eastern goods from the trading cities of Italy.
2. Towards the eastern end, caravans of Iranian merchants set out from Baghdad along the Silk Route to China, via the oasis cities of Bukhara and Samarqand (Transoxiana), to bring Central Asian and Chinese goods, including paper.
Transoxiana also formed an important link in the commercial network which extended north to Russia and Scandinavia for the exchange of European goods, (mainly fur) and Slavic captives (hence the word, slave). Islamic coins, used for the payment of these goods, were found in hoards discovered along the Volga river and in the Baltic region.
Male and female Turkish slaves (ghulam) too were purchased in these markets for the courts of the caliphs and sultans.
3. The fiscal system (income and expenditure of the state) and market exchange increased the importance of money in the central Islamic lands.
Coins of gold, silver and copper (fulus) were minted and circulated, often in bags sealed by money-changers, to pay for goods and services. Gold came from Africa (Sudan) and silver from Central Asia (Zarafshan Valley).
Precious metals and coins also came from Europe, which used these to pay for its trade with the East. Rising demand for money forced people to release their accumulated reserves and idle wealth into circulation. Credit combined with currencies to oil the wheels of commerce.
The greatest contribution of the Muslim world to medieval economic life was the development of superior methods of payment and business organisation. Letters of credit (sakk, origin of the word cheque) and bills of exchange (suftaja) were used by merchants and bankers to transfer money from one place or individual to another. The widespread use of commercial papers freed merchants from the need to carry cash everywhere and also made their journeys safer. The caliph too used the sakk to pay salaries or reward poets and minstrels.
4. Although it was customary for merchants to set up family businesses or employ slaves to run their affairs, formal business arrangements (muzarba) were also common in which sleeping partners entrusted capital to travelling merchants and shared profits and losses in an agreed proportion.
Islam did not stop people from making money so long as certain prohibitions were respected. For instance, interest-bearing transactions (riba) were unlawful, although people circumvented usury in ingenious ways (hiyal), such as borrowing money in one type of coin and paying in another while disguising the interest as a commission on currency exchange (the origin of the bill of exchange).
Many tales from the Thousand and One Nights (Alf Lay la wa Lay la) give us a picture of medieval Islamic society, featuring characters such as sailors, slaves, merchants and money-changers.