Question 1

Which of the following drafts is payable on presentation to the drawee?

Accepted Answer

A) Bill of lading 
B) Sight draft 
C) Letter of credit 
D) Time draft 
E) Offset 
A) Bill of lading 
B) Sight draft 
C) Letter of credit 
D) Time draft 
E) Offset B

Question 2

A firm sells some products to a foreign country. The foreign country pays the firm in dollars but in exchange the firm agrees to spend some of the proceeds from the sale on textiles produced by the foreign country. In which of the following types of countertrade arrangement are the two parties engaged?

Accepted Answer

A) Switch trading 
B) Buyback 
C) Counterpurchase 
D) Barter 
E) Compensation 
A) Switch trading 
B) Buyback 
C) Counterpurchase 
D) Barter 
E) Compensation C

Question 3

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

Accepted Answer

A) True 
 B)False  True

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

Accepted Answer

A) delivering the goods immediately. 
B) paying the draft amount immediately. 
C) providing a collateral for the amount specified in the bill. 
D) writing or stamping a notice of acceptance on its face. 
E) selling the draft to an investor at a discount from its face value. 
A) delivering the goods immediately. 
B) paying the draft amount immediately. 
C) providing a collateral for the amount specified in the bill. 
D) writing or stamping a notice of acceptance on its face. 
E) selling the draft to an investor at a discount from its face value.

Question 6

A lack of trust between two parties engaged in international trade is exacerbated by the:

Accepted Answer

A) saturation of the domestic market. 
B) similar preferences of the parties regarding how a transaction should be configured. 
C) narrowing distance between the two parties due to technological advances. 
D) problems of using an underdeveloped international legal system to enforce contractual obligations. 
E) possibility of doing business with someone with whom they have been associated for a long time. 
A) saturation of the domestic market. 
B) similar preferences of the parties regarding how a transaction should be configured. 
C) narrowing distance between the two parties due to technological advances. 
D) problems of using an underdeveloped international legal system to enforce contractual obligations. 
E) possibility of doing business with someone with whom they have been associated for a long time.

Question 7

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. 
A) counterpurchase. 
B) offset. 
C) switch trading. 
D) buyback. 
E) barter.

Question 8

Which of the following is true of a letter of credit in international trade?

Accepted Answer

A) No cash deposit or collateral is required from the importer. 
B) The exporter pays the trusted third party (usually a bank) a fee for the service. 
C) It becomes a financial contract between the trusted third party (usually a bank) and the exporter. 
D) It is issued by the exporter at the request of the importer. 
E) The creditworthiness of the importer is irrelevant when issuing a letter of credit. 
A) No cash deposit or collateral is required from the importer. 
B) The exporter pays the trusted third party (usually a bank) a fee for the service. 
C) It becomes a financial contract between the trusted third party (usually a bank) and the exporter. 
D) It is issued by the exporter at the request of the importer. 
E) The creditworthiness of the importer is irrelevant when issuing a letter of credit.

Question 9

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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. 
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.

Question 12

In international commerce, a sight draft allows for a delay in payment.

Accepted Answer

A) True 
 B)False

Question 13

The sogo shosha of Japan:

Accepted Answer

A) proactively and continuously seek export opportunities for their affiliated companies. 
B) exclusively serve the largest and most prestigious companies in Japan. 
C) have offices concentrated in the business district of Tokyo. 
D) have monopolized the export market in the country. 
E) consider export only when there is excess production at home. 
A) proactively and continuously seek export opportunities for their affiliated companies. 
B) exclusively serve the largest and most prestigious companies in Japan. 
C) have offices concentrated in the business district of Tokyo. 
D) have monopolized the export market in the country. 
E) consider export only when there is excess production at home.

Question 14

Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?

Accepted Answer

A) Foreign Credit Insurance Association 
B) International Trade Administration 
C) Small Business Administration 
D) U.S. Department of Commerce 
E) U.S. Commercial Service 
A) Foreign Credit Insurance Association 
B) International Trade Administration 
C) Small Business Administration 
D) U.S. Department of Commerce 
E) U.S. Commercial Service

Question 15

Which of the following is an advantage of exporting?

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. 
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.

Question 16

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 exchange 
A) Bill of lading 
B) Time draft 
C) Letter of credit 
D) Sight draft 
E) Bill of exchange

Question 17

What is the difference between a sight draft and a time draft?

Accepted Answer

A sight draft is payable on presentation

Question 18

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Accepted Answer

A) countertrade. 
B) carry trade. 
C) free trade. 
D) counter sale. 
E) countervailing duty. 
A) countertrade. 
B) carry trade. 
C) free trade. 
D) counter sale. 
E) countervailing duty.

Question 19

Japan's great trading houses are referred to as:

Accepted Answer

A) kaizen. 
B) sogo shosha. 
C) zaibatsu. 
D) guanxi. 
E) kanban. 
A) kaizen. 
B) sogo shosha. 
C) zaibatsu. 
D) guanxi. 
E) kanban.

Question 20

While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Accepted Answer

A) True 
 B)False

Which of the following drafts is payable on presentation to the drawee?

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

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

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

A lack of trust between two parties engaged in international trade is exacerbated by the:

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

Which of the following is true of a letter of credit in international trade?

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

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

Which of the following is true of countertrade?

In international commerce, a sight draft allows for a delay in payment.

The sogo shosha of Japan:

Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?

Which of the following is an advantage of exporting?

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

What is the difference between a sight draft and a time draft?

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Japan's great trading houses are referred to as:

While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

Entering Foreign Markets

Global Production and Supply Chain Management

Global Marketing and Rd

Global Human Resource Management

Filters

Exam 14: Exporting, Importing, and Countertrade

Which of the following drafts is payable on presentation to the drawee?

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

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

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

A lack of trust between two parties engaged in international trade is exacerbated by the:

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

Which of the following is true of a letter of credit in international trade?

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

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

Which of the following is true of countertrade?

In international commerce, a sight draft allows for a delay in payment.

The sogo shosha of Japan:

Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?

Which of the following is an advantage of exporting?

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

What is the difference between a sight draft and a time draft?

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Japan's great trading houses are referred to as:

While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

Entering Foreign Markets

Global Production and Supply Chain Management

Global Marketing and Rd

Global Human Resource Management

Filters