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

In a counterpurchase arrangement, the two parties agree to buy goods from each other of approximately equal value. In this case, the firm is selling products to the foreign country and agreeing to spend some of the proceeds on textiles produced by the foreign country. This is a form of counterpurchase.

A Firm Sells Some Products to a Foreign Country