Question

Game Guys, Inc. needed a special silicon substrate. The company executives knew a new start-up in India, Silicon Sisters, Inc., was the best in the world at efficiently mass-producing the product. The Indian company needed MSG (metallurgical grade silicon) in order to make the substrate, which it knew it could get from a Chinese firm. The Chinese firm (mostly owned by the Chinese government) agreed to supply the silicon to Silicon Sisters if it could get a certain quantity of gaming hardware from Game Guys. This beneficial exchange is described as countertrading.

A. True
B. False

Answer 1

Answer: True

Step-by-step explanation:

True

Counter trading is when goods or services are paid for by another goods or services, in a counter trade money is not used to pay for goods or services. The Value of goods received is measured by the value of goods given up.

Chinese company agreed to supply Metallurgical grade silicon to an Indian company in return for a certain quantity of gaming hardware from Game Guys

Answer 2

It is TRUE that this beneficial exchange is described as counter-trading.

Step-by-step explanation:

Counter-trade; means exchanging goods or services which are paid for, in whole or part, with other goods or services, rather than with money. A monetary valuation can however be used in counter-trade for accounting purposes. In dealings between sovereign states, the term bilateral trade is used.

Counter-trade is a reciprocal form of international trade in which goods or services are exchanged for other goods or services rather than for hard currency. This type of international trade is more common in developing countries with limited foreign exchange or credit facilities.