Question 1

An exporter might have to forgo a letter of credit when

Accepted Answer

A)  competing exporters also require letters of credit.
B)  the importer is facing stiff competition from other importers.
C)  the exporter is a dominant player in a noncompetitive market.
D)  the importer is in a strong bargaining position.
E)  he or she knows that the importer will default on payment.F) A) and B)
G) B) and C)

Question 2

Which of the following is a way in which the U.S.Department of Commerce helps potential exporters?

Accepted Answer

A)  It oversees volunteers with international trade experience and directs them to provide one-on-one counseling to active and new-to-export businesses.
B)  It assembles a "comparison shopping service" for countries that are major markets for U.S.exports.
C)  It coordinates a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.
D)  It provides export specialists who act as the export marketing departments or international departments for their client firms.
E)  It starts exporting operations for firms until they are well established.F) A) and E)
G) A) and D)

Question 3

Which of the following is true of countertrade?

Accepted Answer

A)  The governments of developing nations sometimes insist on a certain amount of countertrade.
B)  Countertrade is a means of structuring an international sale when conventional means of payment are cost-effective.
C)  Nonconvertibility is an advantage for exporters.
D)  Nonconvertibility implies that the exporter will be paid only in his or her home currency.
E)  Most exporters desire payment in a currency that is not convertible.F) C) and D)
G) B) and E)

Question 4

Hatfield Manufacturing wants to import an important machine from Sweden.However,the company's head of manufacturing is reluctant to spend the time required to provide the documentation required to obtain a letter of credit that the Swedish exporter insists on.You are the company's CFO.Which of the following would you use as an advantage of a letter of credit to convince the head of manufacturing?

Accepted Answer

A)  The importer does not have to pay for the merchandise until the documents have arrived.
B)  Obtaining pre-export financing becomes easier.
C)  It helps the importer to get goods for a lower price.
D)  It results in lower shipping costs.
E)  The importer does not have to pay the third party a fee for facilitating the transaction.F) A) and D)
G) None of the above

Question 5

The most comprehensive source of information on export opportunities for U.S.firms is the

Accepted Answer

A)  Small Business Administration.
B)  Department of Commerce.
C)  Federal Trade Commission.
D)  Bureau of Competition.
E)  Bank of New York.F) All of the above
G) A) and C)

Question 6

Which of the following is the first step in a typical international trade transaction?

Accepted Answer

A)  The exporter agrees to ship under a letter of credit and specifies relevant information such as prices and delivery terms.
B)  The importer applies to a trusted third party (usually a bank) for a letter of credit to be issued in favor of the exporter for the merchandise the importer wishes to buy.
C)  The importer places an order with the exporter and asks the exporter if he would be willing to ship under a letter of credit.
D)  The exporter ships the goods to the importer on a common carrier.An official of the carrier gives the exporter a bill of lading.
E)  The trusted third party (usually a bank) issues a letter of credit in the importer's favor and sends it to the exporter's bank.F) B) and E)
G) A) and B)

Question 7

Firms engaged in international trade deal with people they may have never seen,who live in different countries,who speak different languages,and who abide by different legal systems.These factors result in

Accepted Answer

A)  easy tracking of the parties involved.
B)  a lack of trust between the parties.
C)  strict enforcement of contractual obligations.
D)  rapid acculturation.
E)  better understanding of how transactions should be configured.F) D) and E)
G) A) and B)

Question 8

A letter of credit may reduce an importer's ability to borrow funds for other purposes.

Accepted Answer

A) True 
 B)False

Question 9

Repayment of medium- and long-term loans that U.S.commercial banks make to foreign borrowers for purchasing U.S.exports is guaranteed by the

Accepted Answer

A)  United Nations.
B)  Central Bank.
C)  World Bank.
D)  Ex-Im Bank.
E)  Export Credit Insurance Association.F) C) and E)
G) A) and E)

Question 10

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.Which of the following is an advantage of exporting that Bloom should use to convince the CEO?

Accepted Answer

A)  It helps in easy currency conversion.
B)  It provides large revenue and profit opportunities.
C)  It reduces the administrative costs incurred by a company.
D)  It helps companies increase their unit costs.
E)  It reduces paperwork and complex formalities.F) A) and C)
G) C) and D)

Question 11

Which of the following institutions within the U.S.Department of Commerce is dedicated to providing businesses with intelligence and assistance for attacking foreign markets?

Accepted Answer

A)  International Trade Administration
B)  Small Business Administration
C)  Federal Trade Commission
D)  Bureau of Competition
E)  Bank of New YorkF) A) and D)
G) A) and C)

Question 12

Describe the Foreign Credit Insurance Association (FCIA).What types of risks does it cover?

Accepted Answer

In the United States,export credit insur...

Question 13

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Accepted Answer

A) True 
 B)False

Question 14

Reactive firms do not consider exporting until their domestic market is saturated.

Accepted Answer

A) True 
 B)False

Question 15

As an exporter,Delios Trading wants to be paid before a consignment is shipped.Correspondingly,its importer in Japan,Abe Imports,wants to pay only upon receipt of the consignment.These conflicting preferences of Delios Trading and Abe Imports are most likely a manifestation of

Accepted Answer

A)  corporate greed.
B)  acculturation.
C)  lack of trust.
D)  cultural insensitivity.
E)  countertrading opportunities.F) C) and E)
G) B) and D)

Question 16

Which of the following is true with respect to the international and domestic practices of settling trade transactions?

Accepted Answer

A)  In an international transaction,a formal promise to pay is required before the buyer can obtain the merchandise.
B)  In an international transaction,the seller usually ships merchandise on an open account.
C)  In a domestic transaction,a draft is used to settle trade transactions.
D)  In an international transaction,the exporter sends a commercial invoice that specifies the amount due and the terms of payment to the importer.
E)  In an international transaction,there is more trust between the exporter and the importer than in a domestic transaction.F) B) and E)
G) C) and D)

Question 17

The use of a specialized third-party trading house in a countertrade arrangement is known as

Accepted Answer

A)  counterpurchase.
B)  offset.
C)  switch trading.
D)  buyback.
E)  barter.F) A) and B)
G) All of the above

Question 18

Hans (from Germany) ,Abe (from Japan) and Chris (from the U.S.) were having a heated argument at an international electronics trade show.The argument was about the export performance of companies from the three countries.Which of the following is a valid statement made by the three people involved in the argument?

Accepted Answer

A)  Historically,the United States has made its living as a trading nation.
B)  Germany has been a relatively self-contained continental economy in which international trade played a minor role.
C)  Unlike Japan,U.S.firms have a strong information advantage when they seek export opportunities.
D)  The United States has not yet evolved an institutional structure for promoting exports similar to that of Germany.
E)  The Ministry of International Trade and Industry (MITI) in the United States is always on the lookout for export opportunities.F) B) and E)
G) B) and D)

Question 19

Issued by a bank at the request of an importer,a bill of lading states that the bank will pay a specified sum of money to a beneficiary,normally the exporter,on presentation of particular,specified documents.

Accepted Answer

A) True 
 B)False

Question 20

The type of countertrade where a firm agrees to purchase a certain amount of materials back from a country to which a sale is made is called

Accepted Answer

A)  barter.
B)  counterpurchase.
C)  compensation.
D)  switch trading.
E)  buyback.F) D) and E)
G) C) and E)

Exam 14: Exporting, Importing, and Countertrade

A letter of credit may reduce an importer's ability to borrow funds for other purposes.

Correct Answer
verified

Correct Answer
verified

Describe the Foreign Credit Insurance Association (FCIA).What types of risks does it cover?

Correct Answer
verified
In the United States,export credit insur...
View Answer

An exporter might have to forgo a letter of credit when

Correct Answer
verified

Which of the following is true of countertrade?

Correct Answer
verified

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Correct Answer
verified

Reactive firms do not consider exporting until their domestic market is saturated.

Correct Answer
verified

Firms engaged in international trade deal with people they may have never seen,who live in different countries,who speak different languages,and who abide by different legal systems.These factors result in

Correct Answer
verified

Correct Answer
verified

Which of the following institutions within the U.S.Department of Commerce is dedicated to providing businesses with intelligence and assistance for attacking foreign markets?

Correct Answer
verified

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.Which of the following is an advantage of exporting that Bloom should use to convince the CEO?

Correct Answer
verified

The most comprehensive source of information on export opportunities for U.S.firms is the

Correct Answer
verified

The type of countertrade where a firm agrees to purchase a certain amount of materials back from a country to which a sale is made is called

Correct Answer
verified

Which of the following is true with respect to the international and domestic practices of settling trade transactions?

Correct Answer
verified

Repayment of medium- and long-term loans that U.S.commercial banks make to foreign borrowers for purchasing U.S.exports is guaranteed by the

Correct Answer
verified

Issued by a bank at the request of an importer,a bill of lading states that the bank will pay a specified sum of money to a beneficiary,normally the exporter,on presentation of particular,specified documents.

Correct Answer
verified

The use of a specialized third-party trading house in a countertrade arrangement is known as

Correct Answer
verified

Which of the following is the first step in a typical international trade transaction?

Correct Answer
verified

Which of the following is a way in which the U.S.Department of Commerce helps potential exporters?

Correct Answer
verified

As an exporter,Delios Trading wants to be paid before a consignment is shipped.Correspondingly,its importer in Japan,Abe Imports,wants to pay only upon receipt of the consignment.These conflicting preferences of Delios Trading and Abe Imports are most likely a manifestation of

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

A letter of credit may reduce an importer's ability to borrow funds for other purposes.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Describe the Foreign Credit Insurance Association (FCIA).What types of risks does it cover?

Correct AnswerverifiedIn the United States,export credit insur...View AnswerShow Answer

An exporter might have to forgo a letter of credit when

Correct AnswerverifiedShow Answer

Which of the following is true of countertrade?

Correct AnswerverifiedShow Answer

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Correct AnswerverifiedShow Answer

Reactive firms do not consider exporting until their domestic market is saturated.

Correct AnswerverifiedShow Answer

Firms engaged in international trade deal with people they may have never seen,who live in different countries,who speak different languages,and who abide by different legal systems.These factors result in

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following institutions within the U.S.Department of Commerce is dedicated to providing businesses with intelligence and assistance for attacking foreign markets?

Correct AnswerverifiedShow Answer

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.Which of the following is an advantage of exporting that Bloom should use to convince the CEO?

Correct AnswerverifiedShow Answer

The most comprehensive source of information on export opportunities for U.S.firms is the

Correct AnswerverifiedShow Answer

The type of countertrade where a firm agrees to purchase a certain amount of materials back from a country to which a sale is made is called

Correct AnswerverifiedShow Answer

Which of the following is true with respect to the international and domestic practices of settling trade transactions?

Correct AnswerverifiedShow Answer

Repayment of medium- and long-term loans that U.S.commercial banks make to foreign borrowers for purchasing U.S.exports is guaranteed by the

Correct AnswerverifiedShow Answer

Issued by a bank at the request of an importer,a bill of lading states that the bank will pay a specified sum of money to a beneficiary,normally the exporter,on presentation of particular,specified documents.

Correct AnswerverifiedShow Answer

The use of a specialized third-party trading house in a countertrade arrangement is known as

Correct AnswerverifiedShow Answer

Which of the following is the first step in a typical international trade transaction?

Correct AnswerverifiedShow Answer

Which of the following is a way in which the U.S.Department of Commerce helps potential exporters?

Correct AnswerverifiedShow Answer

As an exporter,Delios Trading wants to be paid before a consignment is shipped.Correspondingly,its importer in Japan,Abe Imports,wants to pay only upon receipt of the consignment.These conflicting preferences of Delios Trading and Abe Imports are most likely a manifestation of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
In the United States,export credit insur...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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