Which of the Following Is a Drawback of a Countertrade

question 52

Multiple Choice

Which of the following is a drawback of a countertrade agreement?

• A)It fails to give firms a way to finance an export deal.
• B)It requires an in-house trading department to be maintained,which can be expensive and time-consuming.
• C)It is detrimental to the economy of the importing country.
• D)Developing nations may have trouble raising the foreign exchange necessary to pay for imports.
• E)It is not an acceptable means of trading in most developing countries.

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Definitions:

Fixed Costs

Business expenses that are not affected by changes in the level of goods or services produced over the short term.

Variable Costs

Costs that fluctuate in direct proportion to the level of output or activity in a business.

Breakeven Point

The financial situation where total costs equal total revenues, resulting in neither profit nor loss.

Breakeven Point

The point at which total cost and total revenue are equal, meaning a business is neither making a profit nor a loss.