Question

A country barters the surplus coffee beans it grows for other agricultural products grown in a neighboring country. There is no exchange of currency between these countries. The type of business arrangement between the two countries can be regarded as a(n) _____.
a) countertrade arrangement

b) cartel arrangement

c) embargo

d) dumping arrangement

e) franchise

Answer 1

Answer:

The correct answer is (a)

Explanation:

The concept of barter trade is the exchange of goods and service. Barter trade was practised before the paper currency. The real reason to introduce paper currency was that it was hard to exchange goods and service with certain specific demands. Counter-trade arrangement is an agreement of barter trade to the means of exchanging goods and services with other goods and services.