An Estimated 55 Percent of World Trade Is Countertrade

question 185

True/False

An estimated 55 percent of world trade is countertrade.

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Definitions:

Cash Flows

The total amount of money being transferred in and out of a business, serving as a measure of its financial health.

Contribution Margin

The amount that one unit contributes to profit. It is defined as price minus marginal cost.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, or insurance premiums.

Break-Even Quantity

The amount you need to sell to at least break even (make zero profit). The formula (assuming that you can sell all you want at price and with constant marginal cost) is Q = F/(P - MC), where F is fixed costs, P is price, and MC is marginal cost.