Exam 16: Exporting, Importing, and Countertrade

Describe the process involved in financing imports and exports using a letter of credit. Why has this system developed? What is the advantage of using this system?

Which of the following statements is true of EMCs?

Time drafts cannot be sold to investors at a discount from its face value.

A letter of credit states that an exporter has availed credit from the bank to manufacture goods.

Lack of knowledge is one of the biggest impediments to a company becoming a successful exporter.

_____ is a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.

Which of the following statements is true of exporting?

Exporters often face voluminous paperwork and complex formalities.

Japan's great trading houses are called _____.

In an international transaction involving a bank as a third party, the exporter ships the product after:

In a letter of credit transaction, the importer secures the letter of credit:

Which of the following terms refers to the use of a specialized third-party trading house in a countertrade arrangement?

A _____ serves as a receipt, a contract, and a document of title.

The main attraction of _____ is that it can give a firm a way to finance an export deal when other means are not available.

Firms commonly employ a(n) _____ as third party in international transactions.

A draft is simply an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.

_____ is viewed as the most restrictive countertrade arrangement and is primarily used for one-time-only deals in transactions with trading partners who are not creditworthy or trustworthy.

Explain why barter is viewed as the most restrictive counter-trade arrangement.

Explain the problem of trust that persists in international business.

_____ is the direct exchange of goods and/or services between two parties without a cash transaction and is the simplest arrangement.