Answer to Question 1
F
Regional proximity is an important facilitator of economic cooperation. Communication and transportation are facilitated by regional proximity, and these help to facilitate economic cooperation.
Answer to Question 2
Countertrade allows firms from industrialized countries to sell their products in markets in the developing world that otherwise would not be accessible. Countertrade can help an exporting company bypass government restrictions (e.g., exchange controls). Countertrade also provides an opportunity to many developing countries to participate in trade. Moreover, it offers individual from developing countries access to consumer products. Ministries of Foreign Trade in developing countries often restrict imported consumer goods. However, they are likely not to restrict such goods if they are part of a countertrade agreement.
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