Which of the following is an advantage of countertrade?
A) Firms can avoid setting up in-house trading departments.
B) It addresses the issue of lack of trust in international business.
C) It gives a firm a way to finance an export deal when other means are not available.
D) Firms usually appreciate being paid in the form of goods and services instead of hard currency.
E) It usually involves the exchange of high-quality goods that a firm can dispose of profitably.

Question

Quizplus · Accepted Answer

Countertrade provides a means for a firm to finance an export deal when other traditional means of payment, such as cash or credit, are not available. This can be especially useful for firms that are exporting to developing countries where there may be limited access to foreign currency or credit. Countertrade can also help to avoid foreign exchange risk. However, countertrade can be complex and may involve exchanging goods or services that a firm may not need or want, which can result in reduced profitability.

Which of the Following Is an Advantage of Countertrade