8.2 International Trade

Question 1

Which of the following is a form of barter?

A. Consignment.
B. Forfaiting.
C. Countertrade.
D. Cross-border factoring.

Answer 1

C. Countertrade.

Countertrade at its simplest is barter–the exchange of goods or services for other goods or services rather than merely for cash.

Question 2

Which of the following is a benefit to the home country of international diversification by multinational companies?

A. Unions may be weakened.
B. Better international monetary system.
C. Jobs may be lost to foreign subsidiaries.
D. Reduced flexibility of operations in foreign political system.

Answer 2

B. A better international monetary system.

A better international monetary system, because of greater participation by many users, is a benefit of international diversification.