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.This type of countertrade is called a(n)
A)counterpurchase.
B)offset.
C)switch trade.
D)buyback.
E)barter.

Question

Quizplus · Accepted Answer

This type of countertrade is called a buyback, where the firm agrees to take a certain percentage of the plant's output as partial payment for the contract. Counterpurchase involves the supplier agreeing to purchase goods or services from the buying country in return for the original sale. Offset involves the seller agreeing to purchase goods or services from the buying country to reduce the trade imbalance. Switch trade involves switching the destination of goods or services in the middle of a contract. Barter involves the exchange of goods or services without the use of money.

A Firm Builds a Plant in a Country and Agrees