Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

The simplest form of countertrade is bar

Question 3

Exporters usually issue a letter of credit to importers in international transactions.

Accepted Answer

A) True 
 B)False

Question 4

Bank charges on letter of credit will depend on the ____.

Accepted Answer

A)  exporter's creditworthiness 
B)  size of the transaction 
C)  exporter's means of finance 
D)  time taken to approve sale 
A)  exporter's creditworthiness 
B)  size of the transaction 
C)  exporter's means of finance 
D)  time taken to approve sale

Question 5

Firms commonly employ a reputable bank as third party in international transactions.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is a major drawback of engaging in countertrade?

Accepted Answer

A)  Countertrade is not useful when trading with developing nations. 
B)  Financing is difficult when engaging in a countertrade. 
C)  It is not attractive to small organizations. 
D)  Countertrade may involve the exchange of unusable goods. 
A)  Countertrade is not useful when trading with developing nations. 
B)  Financing is difficult when engaging in a countertrade. 
C)  It is not attractive to small organizations. 
D)  Countertrade may involve the exchange of unusable goods.

Question 7

Which of the following is a disadvantage of using a letter of credit (L/C)?

Accepted Answer

A)  A letter of credit does not give protection to the importer. 
B)  A letter of credit does not give protection to the exporter. 
C)  The exporter cannot avail pre-export financing when using a L/C. 
D)  The importer must pay a bank fee for the letter of credit. 
A)  A letter of credit does not give protection to the importer. 
B)  A letter of credit does not give protection to the exporter. 
C)  The exporter cannot avail pre-export financing when using a L/C. 
D)  The importer must pay a bank fee for the letter of credit.

Question 8

The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true about Small Business Administration (SBA)?

Accepted Answer

A)  It is the most comprehensive source of export opportunities information. 
B)  SBA is a private organization managed by leaders of large corporate. 
C)  The SBA employs trade officers throughout the United States. 
D)  SBA offers help exclusively to small businesses that sell products within U.S. 
A)  It is the most comprehensive source of export opportunities information. 
B)  SBA is a private organization managed by leaders of large corporate. 
C)  The SBA employs trade officers throughout the United States. 
D)  SBA offers help exclusively to small businesses that sell products within U.S.

Question 10

Countertrade is least attractive to large, diverse multinational enterprises.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

_____ is a reciprocal buying agreement and occurs when a firm agrees to buy a certain amount of materials back from a country to which a sale is made.

Accepted Answer

A)  Counterpurchase 
B)  Barter 
C)  Offset 
D)  Switch trading 
A)  Counterpurchase 
B)  Barter 
C)  Offset 
D)  Switch trading

Question 13

A _____ is simply an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time.

Accepted Answer

A)  letter of credit 
B)  bill of lading 
C)  draft 
D)  banker's letter 
A)  letter of credit 
B)  bill of lading 
C)  draft 
D)  banker's letter

Question 14

Hiring an EMC will help a novice exporter identify opportunities and navigate the paperwork involved in exporting.

Accepted Answer

A) True 
 B)False

Question 15

Describe the three purposes of a bill of lading.

Accepted Answer

The bill of lading is issued to the expo

Question 16

Which of the following is an advantage of countertrade?

Accepted Answer

A)  Countertrade uses instruments such as time draft and sight draft. 
B)  It is an effective way of doing business with developing nations. 
C)  It provides exporters and opportunity to obtain direct revenue. 
D)  Countertrade prevents exchange of unusable or poor-quality goods. 
A)  Countertrade uses instruments such as time draft and sight draft. 
B)  It is an effective way of doing business with developing nations. 
C)  It provides exporters and opportunity to obtain direct revenue. 
D)  Countertrade prevents exchange of unusable or poor-quality goods.

Question 17

Countertrade is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a major advantage of using a letter of credit?

Accepted Answer

A)  It gives the importer time to resell the merchandise before payment. 
B)  It guarantees the exporter pre-export financing. 
C)  It helps international traders engage in trade with trust. 
D)  It guarantees the importer extra funds for other purposes. 
A)  It gives the importer time to resell the merchandise before payment. 
B)  It guarantees the exporter pre-export financing. 
C)  It helps international traders engage in trade with trust. 
D)  It guarantees the importer extra funds for other purposes.

Question 19

In the modern era, the concept of countertrade arose as a way for the United States to purchase imports.

Accepted Answer

A) True 
 B)False

Question 20

Compare and contrast counterpurchase agreements and offset arrangements. Why might an exporter prefer an offset to a counterpurchase deal?

Accepted Answer

A counterpurchase agreement is a recipro

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

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

Exporters usually issue a letter of credit to importers in international transactions.

Bank charges on letter of credit will depend on the ____.

Firms commonly employ a reputable bank as third party in international transactions.

Which of the following is a major drawback of engaging in countertrade?

Which of the following is a disadvantage of using a letter of credit (L/C)?

The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.

Which of the following statements is true about Small Business Administration (SBA)?

Countertrade is least attractive to large, diverse multinational enterprises.

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 a reciprocal buying agreement and occurs when a firm agrees to buy a certain amount of materials back from a country to which a sale is made.

A _____ is simply an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time.

Hiring an EMC will help a novice exporter identify opportunities and navigate the paperwork involved in exporting.

Describe the three purposes of a bill of lading.

Which of the following is an advantage of countertrade?

Countertrade is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent.

Which of the following is a major advantage of using a letter of credit?

In the modern era, the concept of countertrade arose as a way for the United States to purchase imports.

Compare and contrast counterpurchase agreements and offset arrangements. Why might an exporter prefer an offset to a counterpurchase deal?

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Global Production, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 16: Exporting, Importing, and Countertrade

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

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

Exporters usually issue a letter of credit to importers in international transactions.

Bank charges on letter of credit will depend on the ____.

Firms commonly employ a reputable bank as third party in international transactions.

Which of the following is a major drawback of engaging in countertrade?

Which of the following is a disadvantage of using a letter of credit (L/C)?

The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.

Which of the following statements is true about Small Business Administration (SBA)?

Countertrade is least attractive to large, diverse multinational enterprises.

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 a reciprocal buying agreement and occurs when a firm agrees to buy a certain amount of materials back from a country to which a sale is made.

A _____ is simply an order written by an exporter instructing an importer, or an importer's agent, to pay a specified amount of money at a specified time.

Hiring an EMC will help a novice exporter identify opportunities and navigate the paperwork involved in exporting.

Describe the three purposes of a bill of lading.

Which of the following is an advantage of countertrade?

Countertrade is an alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent.

Which of the following is a major advantage of using a letter of credit?

In the modern era, the concept of countertrade arose as a way for the United States to purchase imports.

Compare and contrast counterpurchase agreements and offset arrangements. Why might an exporter prefer an offset to a counterpurchase deal?

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

International Trade Theory

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Global Production, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters