Question

A firm sells some products to a foreign country. The foreign country pays the firm in dollars, but in exchange, the firm agrees to spend some of the proceeds from the sale on textiles produced by the foreign country. In which of the following types of countertrade arrangement are the two parties engaged?
A. Switch trading
B. Buyback
C. Counterpurchase
D. Barter
E. Compensation

Answer 1

Answer:

C. Counterpurchase

Explanation:

Counter purchase is a particular type of countertrade arrangement whereby an exporter of goods agrees to buy a certain number of goods from the country it exports to, in exchange for the product the country would buy from the exporter. This is commonly used in international business arrangements and the goods that are being sold by the two different parties are usually unrelated to each other but could be of equal value.