A Canadian software company that specializes in developing computer games enters into an agreement with a Japanese software company. Under this agreement, the Japanese firm has the right to manufacture and sell the Canadian firm's games in Japan. This agreement is an example of _____.
A) countertrade
B) foreign licensing
C) international production
D) direct exporting

Question

Quizplus · Accepted Answer

The agreement described in the scenario is an example of foreign licensing, where the Canadian company grants the Japanese company the right to manufacture and sell their games in Japan. Countertrade involves the exchange of goods or services instead of currency, international production involves setting up production facilities in another country, and direct exporting involves selling products directly to a foreign market. None of these apply to the scenario described.

A Canadian Software Company That Specializes in Developing Computer Games