Question : 121.A firm sells some products to a foreign country. The : 1299467

121.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

122.A(n) _____ refers to a buying agreement similar to counterpurchase, but the exporting country can then fulfill the agreement with any firm in the country to which the sale is being made.  

A. switch trade

B. offset

C. buyback

D. arbitrage

E. barter

123.From an exporter’s perspective, why is an offset more attractive than a straight counterpurchase agreement?  

A. It is the simplest countertrade arrangement.

B. It gives the exporter greater flexibility to choose the goods that it wishes to purchase.

C. It allows the use of a specialized third-party trading house.

D. It gives the exporter counterpurchase credits, which can be used to purchase goods from another country.

E. It allows direct exchange of goods and/or services between two parties without a cash transaction.

124.The use of a specialized third-party trading house in a countertrade arrangement is known as _____. 

A. counterpurchase

B. offset

C. switch trading

D. buyback

E. barter

125.When a firm enters a(n) _____ agreement with a country, it often ends up with what are called counterpurchase credits, which can be used to purchase goods from that country. 

A. arbitrage

B. offset

C. switch trading

D. buyback

E. compensation

126._____, a type of countertrade, occurs when a third-party trading house buys the firm’s counterpurchase credits and sells them to another firm that can better use them.  

A. Barter

B. Switch trading

C. Offset

D. Buyback

E. Compensation

127.A firm concludes a counterpurchase agreement with a foreign country for which it receives some counterpurchase credits for purchasing its goods. The firm does not want any foreign goods, however, so it sells the credits to a third-party trading house at a discount. The trading house finds a firm that can use the credits and sells them at a profit. This is an example of _____.  

A. barter

B. switch trading

C. an offset

D. a buyback

E. compensation

128.A(n) _____ occurs when a firm builds a plant in a country and agrees to take a certain percentage of the plant’s output as partial payment for the contract.  

A. counterpurchase

B. offset

C. switch trading

D. buyback

E. barter

129.TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period. This is an example of _____.  

A. switch trading

B. a buyback

C. a counterpurchase

D. an offset

E. barter

130.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.