Question 1

A(n) _____ occurs when a firm builds a plant in a country and agrees to take a certain percentage of the plant's output as partial payment for the contract.

Accepted Answer

A)   buyback
B)   barter
C)   offset
D)   switch trade A

Question 2

_____ is viewed as the most restrictive countertrade arrangement.

Accepted Answer

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

Question 3

Countertrade denotes a whole range of agreements that involve financial exchanges.

Accepted Answer

A) True 
 B)False  True

Question 4

The bank promises to pay on behalf of the importer when a bank is used as a third party in international transactions.

Accepted Answer

A) True 
 B)False

Question 5

A(n) _____ can help new exporters identify opportunities and avoid common pitfalls.

Accepted Answer

A)   MITI
B)   Export-Import Bank
C)   in-house trading department
D)   export management company

Question 6

_____ can be used when a government restricts the convertibility of its currency to preserve its foreign exchange reserves so they can be used to service international debt commitments and purchase crucial imports.

Accepted Answer

A)   A buyback
B)   Countertrade
C)   An offset
D)   Switch trading

Question 7

A _____ allows for a delay in payment-normally 30, 60, 90, or 120 days.

Accepted Answer

A)   bill of lading
B)   sight draft
C)   bill of exchange
D)   time draft

Question 8

As a receipt, the bill of lading indicates that the carrier:

Accepted Answer

A)   provides a written promise of payment before releasing the merchandise.
B)   has obtained the merchandise described on the face of the document.
C)   receives payment from a third-party such as a bank or trading house.
D)   is obligated to provide a transportation service in return for a certain charge.

Question 9

Which of the following statements is true of export credit insurance?

Accepted Answer

A)   Exporter will require more insurance if a letter of credit is used in transactions.
B)   The FCIA provides coverage against commercial risks and political risks.
C)   Private associations cannot offer export insurance in the United States.
D)   Organizations do not receive coverage against political risks of global trade.

Question 10

In theory, the advantage of EMCs is that they are:

Accepted Answer

A)   managed by governments that provide export subsidies.
B)   not-for-profit organizations that provide free service.
C)   subsidized by the Department of Commerce.
D)   experienced specialists who can help the neophyte exporter.

Question 11

Compare and contrast time drafts and sight drafts.

Accepted Answer

The answer of Compare and contrast time drafts and sight...

Question 12

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

Accepted Answer

A)   Floating exchange system
B)   Countertrade
C)   Letter of credit trade
D)   Fixed exchange system

Question 13

Importers usually issue a _____ to importers in international transactions.

Accepted Answer

A)   sight draft
B)   letter of credit
C)   time draft
D)   bill of lading

Question 14

Why do so many firms take a reactive approach to exporting rather than a proactive approach?

Accepted Answer

The answer of Why do so many firms take a...

Question 15

_____ 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)   Offset
C)   Counterpurchase
D)   Buyback

Question 16

Through its _____ program, the SBA oversees about 850 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.

Accepted Answer

A)   matchmaker
B)   SCORE
C)   ELAN
D)   trade fair

Question 17

_____ occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Accepted Answer

A)   Countertrading
B)   Offsetting
C)   Switch trading
D)   Bartering

Question 18

Describe the information sources that are available to American companies to learn about export opportunities.

Accepted Answer

The answer of Describe the information sources that are available...

Question 19

_____ are export specialists that act as the export marketing department or international department for their client firms.

Accepted Answer

A)   Small Business Development Centers (SBDCs) 
B)   Centers for International Business Education and Research (CIBERs) 
C)   Export Legal Assistance Networks (ELANs) 
D)   Export Management Companies (EMCs)

Question 20

The great promise of exporting is that:

Accepted Answer

A)   large revenue opportunities are often found in foreign markets.
B)   it provides more opportunities to smaller firms than larger firms.
C)   international trade is protected against exchange risks.
D)   it reduces the need for insuring businesses against political risks.

Exam 16: Exporting, Importing, and Countertrade