Chapter 12

Which of the following is not a benefit of countertrade for buyers?

• Transfer of technology

• Alleviating balance of payments difficulties

• Maintenance of stable prices for imports and exports

• All of the above are benefits of countertrade

Which of the following is not a theory of countertrade?

• Countertrade is positively correlated with a country's level of exports.

• Countertrade is often used as a substitute for foreign direct investment.

• The stricter the level of exchange controls, the lower the level of countertrade activity.

• Countertrade is positively correlated with a country's level of indebtedness.

If the transaction involves the use of money, it is considered:

• Counterpurchase

• Offset

• Buyback

• All of the above

What type of arrangement allows two governments to agree to purchase a certain volume of each other's goods and/or services over a certain period of time, usually a year?

• Parallel

• Clearing

• Simple

• Compensation

In general, what is the duration of a counterpurchase?

• 2 to 3 years

• 3 to 4 years

• 3 to 5 years

• 5 to 8 years

Private countertrade transactions, however, fall outside the purview of the , which regulates only governmental actions.

• World Bank

• IMF

• GATT/WTO

• NAFTA

What is the U.S. policy toward countertrade?

• U.S. government prohibits federal agencies from promoting countertrade in their business.

• A hands-off approach in relation to private transactions with U.S. corporations.

• The U.S. government allows federal agencies to promote countertrade.

• a and b

Buyback and counterpurchase are called parallel transactions.

• True

• False

The U.S. government prohibits the use of countertrade in international business transactions.

• True

• False

Countertrade is more ancient than (precedes) barter.

• True

• False