Which of the Following Is True of Countertrading

question 11

Multiple Choice

Which of the following is true of countertrading?

• A) Frequently there is inadequate time to conduct a market analysis in a countertrade negotiation.
• B) Identifying countries that have a history of countertrading is one of the major problems with countertrades.
• C) The use of countertrading to sell a good implies that the demand for the good is highly elastic.
• D) Countertrading does not benefit countries that face a shortage of hard currencies with which to trade.
• E) The U.S. dollar is the reserve currency that is used in countertrades.

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Definitions:

Net Sales

The revenue generated from goods or services sold by a company after returns, allowances for damaged or missing goods, and discounts are subtracted.

Operating Expenses

Incurred expenses not directly tied to the production of goods or services, such as administrative and sales expenses, that are necessary for running a business.

Depreciation

The method of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Net New Borrowing

The difference between the amounts a company has borrowed and repaid during a specific period, indicating how much new debt it has taken on.