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In this type of countertrade, the seller is paid up front part of the cost of the plant in an agreed-on convertible currency, and he/she agrees to purchase specific quantities of the plant’s output over an extended period of timeGroup of answer choicesBuyback agreementCounterpurchaseOffset purchaseNone of these

Question

In this type of countertrade, the seller is paid up front part of the cost of the plant in an agreed-on convertible currency, and he/she agrees to purchase specific quantities of the plant’s output over an extended period of timeGroup of answer choicesBuyback agreementCounterpurchaseOffset purchaseNone of these

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Solution

The answer is Buyback agreement. In a buyback agreement, the seller agrees to set up a plant or other investment in a country, and then over time, they agree to take a certain amount of the output from that plant as partial payment. This is often used in international trade when dealing with countries that may not have the necessary hard currency for payment.

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