Final answer:
The exchange of goods for other goods instead of money is known as countertrade, not protectionism, which involves governmental efforts to limit foreign competition. Option B is the correct answer.
Explanation:
When a country or a firm exchanges goods for other goods instead of money, it engages in countertrade. This practice is distinct from protectionism, which involves a government legislating policies to reduce or block international trade to shield domestic producers and competitors from foreign competition, often by using tariffs, import quotas, and nontariff barriers.
Unlike protectionism, countertrade is a type of barter agreement where goods and services are traded without direct monetary exchange, which can benefit countries and firms when foreign exchange reserves are low or when there are other trade difficulties.
Countertrade can take various forms, including barter, counter-purchase, offset, switch trading, and buyback. It should not be confused with illegal activities or economic espionage, which involve clandestine operations to unlawfully obtain trade secrets or confidential business information. Nor should it be mistaken for protectionist measures such as economic boycotts, which are official sanctions prohibiting trade with certain countries due to political disagreements.
In summary, the correct option answer to the question, "When a country or a firm exchanges goods for other goods instead of money, it engages in _____." is B. countertrade.