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. What type of countertrade arrangement are the two parties engaged in?
A) switch trading
B) buyback
C) counterpurchase
D) barter
E) compensation

Question

Quizplus · Accepted Answer

In a counterpurchase arrangement, the seller agrees to purchase goods or services from the buyer as part of the sales agreement. Here, the firm agrees to spend some of the proceeds on textiles from the foreign country, which fits the definition of counterpurchase.

A Firm Sells Some Products to a Foreign Country