When doing business with former communist countries,Trader's Paradise insists on getting paid in a currency that can be traded freely in the foreign exchange market.The price of this currency is determined by the forces of supply and demand.Which of the following is the mode of payment illustrated in this scenario?

Question

Quizplus · Accepted Answer

The mode of payment illustrated in the scenario is convertible currency, which refers to currencies that can freely be exchanged for another currency on the foreign exchange market. The insistence on getting paid in a currency that can be traded freely indicates that the Trader's Paradise wants to minimize the risk associated with doing business in former communist countries with less stable currencies. In this case, the price of the currency is determined by the market forces of supply and demand.

When Doing Business with Former Communist Countries,Trader's Paradise Insists on Getting