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

Question

Quizplus · Accepted Answer

Counterpurchase is a reciprocal buying agreement. It occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

A Firm Sells Some Products to a Foreign Country