Question 1

Which of the following is a function of an export management company?

Accepted Answer

A)   It starts exporting operations for a firm with the understanding that the firm will take over operations after they are well established.
B)   It coordinates the Export Legal Assistance Network, a nationwide group of international trade attorneys.
C)   It oversees volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.
D)   It collects duties on exported products and sets interest rates for charging foreign investors.
E)   It gives novice exporters the names and addresses of potential distributors in foreign markets along with businesses they are in.F) None of the above
G) B) and D)

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

In the United States,export credit insur...

Question 4

In international commerce,time drafts are negotiable instruments.

Accepted Answer

A) True 
 B)False

Question 5

In international commerce,a draft is sometimes referred to as a _____.

Accepted Answer

A)   bill of exchange
B)   letter of credit
C)   bill of lading
D)   counterpurchase
E)   buybackF) A) and E)
G) B) and E)

Question 6

Low growth prospects makes firms reactive about seeking opportunities for exporting.

Accepted Answer

A) True 
 B)False

Question 7

Countertrade is most attractive to:

Accepted Answer

A)   small exporters.
B)   large multinational enterprises.
C)   only U.S. firms.
D)   any firm in democratic nations.
E)   new companies.F) B) and D)
G) A) and E)

Question 8

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 only be paid in his or her home currency.
E)   Most exporters desire payment in a currency that is not convertible.F) D) and E)
G) A) and C)

Question 9

Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer?

Accepted Answer

A)   Bill of lading
B)   Time draft
C)   Letter of credit
D)   Sight draft
E)   Bill of exchangeF) A) and B)
G) B) and E)

Question 10

Which of the following is a reason why firms are not proactive about seeking export opportunities?

Accepted Answer

A)   They are unfamiliar with foreign market opportunities.
B)   domestic regulations limit their ability to export profitably.
C)   they overestimate the time and expertise needed to cultivate business in foreign countries.
D)   they do not find the foreign market challenging enough.
E)   the export market is similar to the home market in terms of legal and business practices.F) A) and E)
G) A) and B)

Question 11

Only large companies have benefited significantly from the moneymaking opportunities of exporting.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is an advantage of a letter of credit for an importer?

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) All of the above
G) B) and C)

Question 13

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 14

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 creditF) None of the above
G) A) and C)

Question 15

The two categories of drafts (or bills of exchange) are:

Accepted Answer

A)   contract drafts and lending drafts.
B)   single-party drafts and multi-party drafts.
C)   title drafts and quantity drafts.
D)   sight drafts and time drafts.
E)   offset draft and counter draftF) A) and D)
G) B) and D)

Question 16

Briefly describe the different types of countertrade arrangements.

Accepted Answer

The five distinct types of countertrade ...

Question 17

_____,a type of countertrade,occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

Accepted Answer

A)   Barter
B)   Counterpurchase
C)   Compensation
D)   Switch trading
E)   BuybackF) B) and D)
G) D) and E)

Question 18

Which of the following is an advantage of export credit insurance?

Accepted Answer

A)   It gives a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents.
B)   It protects exporters from the risk that the foreign importer will default on payment.
C)   It puts the importer in a strong bargaining position.
D)   It enables exporters to insist on a letter of credit.
E)   It allows for a delay in payment.F) B) and D)
G) C) and D)

Question 19

Which of the following is an advantage of having a letter of credit?

Accepted Answer

A)   It allows payment for merchandise after its delivery.
B)   It facilitates an exporter to obtain pre-export financing.
C)   It allows an exporter to get a higher price for his or her goods.
D)   It helps exporters incur lower shipping costs.
E)   It does not require the importer to pay any fee.F) A) and B)
G) A) and C)

Question 20

When serving as a _____,a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer.

Accepted Answer

A)   document of title
B)   contract
C)   receipt
D)   time draft
E)   collateralF) A) and C)
G) C) and D)

Exam 14: Exporting, Importing, and Countertrade

Which of the following is a reason why firms are not proactive about seeking export opportunities?

Correct AnswerverifiedShow Answer

Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer?

Correct AnswerverifiedShow Answer

In international commerce,time drafts are negotiable instruments.

Correct AnswerverifiedShow Answer

Which of the following is a function of an export management company?

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

Which of the following is an advantage of export credit insurance?

Correct AnswerverifiedShow Answer

When serving as a _____,a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer.

Correct AnswerverifiedShow Answer

Which of the following is an advantage of having a letter of credit?

Correct AnswerverifiedShow Answer

_____,a type of countertrade,occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

Correct AnswerverifiedShow Answer

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

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

The two categories of drafts (or bills of exchange) are:

Correct AnswerverifiedShow Answer

Low growth prospects makes firms reactive about seeking opportunities for exporting.

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

Countertrade is most attractive to:

Correct AnswerverifiedShow Answer

In international commerce,a draft is sometimes referred to as a _____.

Correct AnswerverifiedShow Answer

Briefly describe the different types of countertrade arrangements.

Correct AnswerverifiedThe five distinct types of countertrade ...View AnswerShow Answer

Only large companies have benefited significantly from the moneymaking opportunities of exporting.

Correct AnswerverifiedShow Answer

Which of the following is true of countertrade?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of a letter of credit for an importer?

Correct AnswerverifiedShow Answer

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

Correct Answer
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The five distinct types of countertrade ...
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