Question

In the late 1960s, Pepsi agreed to an exchange of Pepsi syrup and bottling equipment in return for Stolichnaya vodka. This is an example of:

Answer 1

Pepsi's trade of syrup and equipment for Stolichnaya vodka in the late 60s exemplifies countertrade, where goods are exchanged without monetary transactions, often due to currency issues or to conserve foreign exchange reserves.

Step-by-step explanation:

In the late 1960s, Pepsi agreed to an exchange of Pepsi syrup and bottling equipment in return for Stolichnaya vodka. This kind of deal is an example of countertrade, which is a form of international trade where goods and services are exchanged for other goods and services without using a medium of exchange, such as money. An interesting aspect of such trades is that they may occur in situations where foreign currency is scarce or where countries want to preserve their foreign exchange reserves. PepsiCo's agreement with the Soviet Union was one of the most famous examples, where Pepsi became one of the first Western products to be sold in the Soviet Union, effectively symbolizing a thaw in Cold War tensions.