Organizations resort to countertrade of goods and services when:
A) the importer defaults on payment.
B) the goods and services cannot be traded for money.
C) the exporter is not able to get a letter of credit from a local bank.
D) a formal document for acknowledgement is not available.
E) the conventional means of payment are cheaper.

Question

Quizplus · Accepted Answer

Countertrade is used when conventional means of payment are not possible or when the parties involved don't want to use cash. This can happen when the importer's country doesn't have enough foreign currency reserves or a currency that's widely accepted for international trade. In such cases, the parties may resort to exchanging goods and services instead of cash. This is known as countertrade. Therefore, choice B is the most appropriate answer as it indicates that goods and services cannot be traded for money.

Organizations Resort to Countertrade of Goods and Services When