Markets with excess productive capacity: a. frequently use ...

[jessicacav]

Markets with excess productive capacity:
 a. frequently use protectionistic measures to keep the factories running.
  b. commonly seek foreign direct investment.
  c. encourage imports of competing products to stimulate demand.
  d. decrease marketing expenditures.

Question 2

Barter is the only type of exchange that does not involve monetary exchange.
 
 Indicate whether the statement is true or false

[fwbard]

Answer to Question 1

A
Markets with excess productive capacity frequently use protectionistic measures to prevent imports from exacerbating the capacity problem. Foreign direct investment may also cause capacity to increase unless the investment was in a complementary product category, so it would not necessarily be sought out. Marketing expenditures may decrease due to improper budget setting, but it is more likely that marketing expenditures would increase in an attempt to stimulate demand. The answer may be found in the Protection of Markets with Excess Productive Capacity section (3-1a).

Answer to Question 2

T
Barter is the only type of exchange that does not involve monetary exchange. At the next level are clearing agreements and switch trading which involve the transfer of currency, usually a mutually agreed upon hard currency. All other types of countertrade are based on direct monetary exchange.

[jessicacav]

Thank you

[fwbard]

No problemo