70) Countertrade emerged in the 1960s as a way for the ________ to purchase imports.
A) United States
B) European Union
C) ASEAN countries
D) Soviet Union and the then-communist states of Eastern Europe
71) ________ is viewed as the most restrictive countertrade arrangement.
A) Barter
B) Offset
C) Buyback
D) Switch trading
72) ________ is primarily used for one time–only deals in transactions with trading partners who
are not creditworthy or trustworthy.
A) Counterpurchase
B) Barter
C) Offset
D) Buyback
73) ________ occurs when a firm agrees to purchase a certain amount of materials back from a
country to which a sale is made.
A) Barter
B) Offset
C) Counterpurchase
D) Buyback
74) ________ occurs when a firm supplies technology, equipment, training, or other services in a
country and agrees to take a certain percentage of the resultant output as partial payment for the
contract.
A) A counterpurchase
B) An offset
C) A barter
D) A buyback
75) The main attraction of ________ is that it can give a firm a way to finance an export deal when
there are no other means available.
A) a countertrade
B) a buyback
C) a counterpurchase
D) an offset
76) ________ is an alternative means of structuring an international sale when conventional means
of payment are difficult, costly, or nonexistent.
A) Floating exchange system
B) Countertrade
C) Letter of credit trade
D) Fixed exchange system
77) ________ denotes a range of barter-like agreements and its principle is to trade goods and
services for other goods and services when they cannot be traded for money.
A) Countertrade
B) Cross-selling
C) Matchmaking
D) Letter of credit
78) Which of the following statements is true of countertrade?
A) Countertrade reduces the profitability of competing firms and is considered an unethical
practice.
B) Countertrade is a conventional means to pay exporters.
C) Smaller organizations commonly use countertrade in international transactions.
D) Countertrade occurs when goods and services are traded for other goods and services.
79) ________ is the direct exchange of goods and/or services between two parties without a cash
transaction and is the simplest arrangement.
A) Counterpurchase
B) Barter
C) Offset
D) Switch trading
80) ________ is viewed as the most restrictive countertrade arrangement and is primarily used for
onetime-only deals in transactions with trading partners who are not creditworthy or trustworthy.
A) Switch trading
B) Offset
C) Barter
D) Buyback
81) ________ is a reciprocal buying agreement and occurs when a firm agrees to buy a certain
amount of materials back from a country to which a sale is made.
A) Counterpurchase
B) Barter
C) Offset
D) Switch trading
82) In ________, one party agrees to purchase goods and services with a specified percentage of
the proceeds from the original sale, and this party can fulfill the obligation with any firm in the
country to which the sale is being made.
A) a switch trade
B) an offset
C) a barter
D) a buyback
83) Which of the following terms refers to the use of a specialized third-party trading house in a
countertrade arrangement?
A) counterpurchase
B) barter
C) offset
D) switch trading
84) ________ 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) A buyback
B) A barter
C) An offset
D) A switch trade
85) Which of the following is an advantage of countertrade?
A) Countertrade uses instruments such as time drafts and sight drafts.
B) It is an effective way of doing business with developing nations.
C) It provides exporters an opportunity to obtain direct revenue.
D) Countertrade prevents the exchange of unusable or poor-quality goods.
86) Which of the following is a major drawback of engaging in countertrade?
A) Countertrade is not useful when trading with developing nations.
B) Financing is difficult when engaging in a countertrade.
C) It is not attractive to small organizations.
D) Countertrade may involve the exchange of unusable goods.
87) Countertrade is
A) most attractive to small, primarily domestic enterprises.
B) least attractive to small, primarily domestic enterprises.
C) most attractive to large, diverse multinational enterprises.
D) least attractive to large, diverse multinational enterprises.
88) ________ can be used when a government restricts the convertibility of its currency to
preserve its foreign exchange reserves so they can be used to service international debt
commitments and purchase crucial imports.
A) A buyback
B) Countertrade
C) An offset
D) Switch trading
89) ________ 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) Countertrading
B) Offsetting
C) Switch trading
D) Bartering