Countertrade in an International Transaction Is

question 19

Multiple Choice

Countertrade in an international transaction is:

• A)the practice of accepting locally produced merchandise in lieu of money as payment for goods and services.
• B)passing the risk associated with changes in exchange rates to another.
• C)transferring purchasing power from those who normally deal in one currency to those who generally do business in another.
• D)a market in which parties agree to exchange a fixed amount of one currency for a fixed amount of a second currency.

---

Definitions:

Explicit Costs

Input costs that require an outlay of money by the firm

Long-Run Equilibrium

A state where all factors of production and costs are variable, allowing firms to make adjustments leading to the ideal output level.

Profit-Maximizing

A strategic approach in which a firm determines the best output level and pricing to achieve the highest possible profit.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single entity has a significant influence on the market price.