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    Counter-Trade Economic Principles

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    Two questions that I need help with, please.

    What types of firms or organizations are most likely to engage in countertrade and why do they choose this type of trade?

    Can someone explain to me when does concentration of production make sense to a business and consumer and why?

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    Solution Preview

    Two questions that I need help with, please.
    What types of firms or organizations are most likely to engage in countertrade and why do they choose this type of trade?
    Can someone explain to me when does concentration of production make sense to a business and consumer and why?

    Hello, I will try and provide you with the information you need in a step-by-step process, that I trust will be useful to you.

    Introduction:

    The best place to begin is with a definition of counter-trade. Counter-trade takes place when a company in a country with serious currency issues wishes to purchase or sell goods, but cannot pay with their country's currency. In order to make a sale, the company must set up some type of barter or exchange of goods for other goods in order to make the sale (Gonzales, 2010).

    1. Let's next explore the different types of counter-trade.

    A. Barter is simply the exchange of a good or service for a good or service of equal value without the exchange of currency (McVey, 1981).

    B. Counter purchase occurs when nations get involved in the counter-trade equation. Counter purchase is when a nation purchases a valuable commodity from another nation with a promise to provide something the selling nation will need in the future ...

    Solution Summary

    This brief response provide some fundamental information on the economic principles surrounding counter-trading. Counter-trading is a complex international economic process that provides organizations without sufficient currency, to a format for accomplishing those trades. This response provides the student with some references he or she can use to produce a response to the instructor.

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