Question 1

In international commerce, a person or business initiating a draft is known as the drafter and the party to whom the draft is presented is known as the draftee.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of exporting?

Accepted Answer

A)  Many foreign customers require face-to-face negotiations on their home turf.
B)  Large firms tend to wait for the world to come to them, rather than going out into the world to seek opportunities.
C)  Exporters have the advantage of reduced paperwork and fewer formalities.
D)  Medium-sized and small firms are proactive about seeking opportunities for profitable exporting.
E)  Firms that focus only on exporting often lose out on significant opportunities for growth and cost reduction.F) C) and D)
G) None of the above

Question 3

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) A) and E)
G) B) and D)

Question 4

What are export management companies? What are their advantages and disadvantages?

Accepted Answer

Export management companies (EMCs) are e...

Question 5

The Export-Import Bank provides financing aid to prospective U.S. exporters.

Accepted Answer

A) True 
 B)False

Question 6

Countertrade is most likely to be used when:

Accepted Answer

A)  the foreign currency is easily convertible.
B)  the exporter has a letter of credit.
C)  the conventional means of international trade transaction are difficult.
D)  there is mutual trust between the exporter and the importer.
E)  an export management company is used.F) C) and D)
G) B) and E)

Question 7

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

Accepted Answer

In the United States, export credit insu...

Question 8

In terms of using a third party in international trade, title to the products is given to a bank by the exporter in the form of a document known as a:

Accepted Answer

A)  merchandise bill.
B)  bill of lading.
C)  bill of exchange.
D)  draft.
E)  letter of credit.F) A) and E)
G) A) and D)

Question 9

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer, it serves as a:

Accepted Answer

A)  document of title.
B)  contract.
C)  receipt.
D)  time draft.
E)  collateral.F) B) and E)
G) B) and D)

Question 10

Which of the following is true of the export performance of the United States, Germany, and Japan?

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) A) and B)
G) C) and D)

Question 11

A firm concludes a counterpurchase agreement with a foreign country for which it receives some counterpurchase credits for purchasing its goods. The firm does not want any foreign goods, however, so it sells the credits to a third-party trading house at a discount. The trading house finds a firm that can use the credits and sells them at a profit. This is an example of:

Accepted Answer

A)  barter.
B)  switch trading.
C)  an offset.
D)  a buyback.
E)  compensation.F) None of the above
G) A) and B)

Question 12

A firm that enters many markets at once:

Accepted Answer

A)  runs the risk of spreading its limited management resources too thin.
B)  becomes established in all the markets.
C)  gets the time to learn about each market.
D)  has fewer export opportunities.
E)  reduces the costs of any subsequent failure.F) B) and D)
G) A) and E)

Question 13

In international commerce, an order written by an exporter instructing an importer to pay a specified amount of money at a specified time is known as a:

Accepted Answer

A)  bill of lading.
B)  draft.
C)  letter of credit.
D)  counterpurchase.
E)  buyback.F) C) and E)
G) B) and C)

Question 14

Briefly describe the different forms of government-backed assistance that help potential U.S. exporters finance their export programs.

Accepted Answer

Prospective U.S. exporters can draw on t...

Question 15

In international commerce, time drafts are negotiable instruments.

Accepted Answer

A) True 
 B)False

Question 16

Many medium-sized and small firms are not proactive in seeking export opportunities because:

Accepted Answer

A)  they are familiar with the foreign market and do not find it challenging enough.
B)  the export market is similar to the home market in terms of legal and business practices.
C)  they are intimidated by the complexities and mechanics of exporting to foreign countries.
D)  domestic regulations limit their ability to export profitably.
E)  they can't recruit managers with the expertise needed to cultivate business in foreign countries.F) None of the above
G) A) and E)

Question 17

Which of the following is a drawback of relying on an export management company (EMC) ?

Accepted Answer

A)  It does not provide references and has no antecedents.
B)  The exporting company can fail to develop its own exporting capabilities.
C)  It does not have expert specialists to help a neophyte exporter identify opportunities.
D)  It typically lacks information about local business regulations.
E)  The exporting company cannot avoid the common pitfalls of exporting.F) None of the above
G) A) and C)

Question 18

Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true of counterpurchase?

Accepted Answer

A)  It is the most restrictive countertrade arrangement.
B)  It is a reciprocal buying agreement.
C)  It is the simplest countertrade arrangement.
D)  It uses a specialized third-party trading house.
E)  It is the direct exchange of goods without a cash transaction.F) A) and B)
G) None of the above

Question 20

When a bill of lading specifies that the carrier is obligated to provide a transportation service in return for a certain charge, it serves as a:

Accepted Answer

A)  contract.
B)  receipt.
C)  document of title.
D)  letter of credit.
E)  bill of exchange.F) C) and D)
G) B) and C)

Exam 14: Exporting, Importing, and Countertrade

Which of the following is a drawback of relying on an export management company (EMC) ?

Correct Answer
verified

Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.

Correct Answer
verified

Which of the following is true of counterpurchase?

Correct Answer
verified

Many medium-sized and small firms are not proactive in seeking export opportunities because:

Correct Answer
verified

A firm that enters many markets at once:

Correct Answer
verified

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

Correct Answer
verified

In international commerce, time drafts are negotiable instruments.

Correct Answer
verified

Countertrade is most likely to be used when:

Correct Answer
verified

In international commerce, a person or business initiating a draft is known as the drafter and the party to whom the draft is presented is known as the draftee.

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 insu...
View Answer

Which of the following is true of the export performance of the United States, Germany, and Japan?

Correct Answer
verified

In terms of using a third party in international trade, title to the products is given to a bank by the exporter in the form of a document known as a:

Correct Answer
verified

Correct Answer
verified

What are export management companies? What are their advantages and disadvantages?

Correct Answer
verified
Export management companies (EMCs) are e...
View Answer

Which of the following is true of exporting?

Correct Answer
verified

In international commerce, an order written by an exporter instructing an importer to pay a specified amount of money at a specified time is known as a:

Correct Answer
verified

When a bill of lading specifies that the carrier is obligated to provide a transportation service in return for a certain charge, it serves as a:

Correct Answer
verified

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer, it serves as a:

Correct Answer
verified

Briefly describe the different forms of government-backed assistance that help potential U.S. exporters finance their export programs.

Correct Answer
verified
Prospective U.S. exporters can draw on t...
View Answer

The Export-Import Bank provides financing aid to prospective U.S. exporters.

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

Which of the following is a drawback of relying on an export management company (EMC) ?

Correct AnswerverifiedShow Answer

Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.

Correct AnswerverifiedShow Answer

Which of the following is true of counterpurchase?

Correct AnswerverifiedShow Answer

Many medium-sized and small firms are not proactive in seeking export opportunities because:

Correct AnswerverifiedShow Answer

A firm that enters many markets at once:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In international commerce, time drafts are negotiable instruments.

Correct AnswerverifiedShow Answer

Countertrade is most likely to be used when:

Correct AnswerverifiedShow Answer

In international commerce, a person or business initiating a draft is known as the drafter and the party to whom the draft is presented is known as the draftee.

Correct AnswerverifiedShow Answer

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

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

Which of the following is true of the export performance of the United States, Germany, and Japan?

Correct AnswerverifiedShow Answer

In terms of using a third party in international trade, title to the products is given to a bank by the exporter in the form of a document known as a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What are export management companies? What are their advantages and disadvantages?

Correct AnswerverifiedExport management companies (EMCs) are e...View AnswerShow Answer

Which of the following is true of exporting?

Correct AnswerverifiedShow Answer

In international commerce, an order written by an exporter instructing an importer to pay a specified amount of money at a specified time is known as a:

Correct AnswerverifiedShow Answer

When a bill of lading specifies that the carrier is obligated to provide a transportation service in return for a certain charge, it serves as a:

Correct AnswerverifiedShow Answer

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer, it serves as a:

Correct AnswerverifiedShow Answer

Briefly describe the different forms of government-backed assistance that help potential U.S. exporters finance their export programs.

Correct AnswerverifiedProspective U.S. exporters can draw on t...View AnswerShow Answer

The Export-Import Bank provides financing aid to prospective U.S. exporters.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Export management companies (EMCs) are e...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Prospective U.S. exporters can draw on t...
View Answer

Correct Answer
verified