Question 1

Countertrade is:

Accepted Answer

A)  most attractive to small, primarily domestic enterprises. 
B)  least attractive to small, primarily domestic enterprises. 
C)  most attractive to large, diverse multinational enterprises. 
D)  least attractive to large, diverse multinational enterprises.

Question 2

In a(n) ____, one party agrees to purchase goods and services with a specified percentage of the proceeds from the original sale and this party can fulfill the obligation with any firm in the country to which the sale is being made.

Accepted Answer

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

Question 3

Discuss the idea of compensation or buybacks as they relate to countertrade. Provide an example of a buyback arrangement.

Accepted Answer

The answer of Discuss the idea of compensation or buybacks...

Question 4

Compare and contrast the export assistance provided to German and Japanese companies with that given to American companies. Discuss the implications of the differences between the countries.

Accepted Answer

The answer of Compare and contrast the export assistance provided...

Question 5

A draft used in international transactions:

Accepted Answer

A)  is a document requesting payment. 
B)  explains the conditions of a contract. 
C)  is the same as a letter of credit. 
D)  gives a bank guarantee to an exporter.

Question 6

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

Accepted Answer

A)  Barter 
B)  Offset 
C)  Countertrade 
D)  Buyback

Question 7

U.S. organizations can get financing aid from the Export-Import Bank.

Accepted Answer

A) True 
 B)False

Question 8

A _____ allows for a delay in payment.

Accepted Answer

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

Question 9

The person or business initiating a draft is known as the ____.

Accepted Answer

A)  beneficiary 
B)  drawee 
C)  maker 
D)  trustee

Question 10

_____ can avail loans from Ex-Im Bank to pay U.S. suppliers.

Accepted Answer

A)  Foreign borrowers 
B)  Individuals 
C)  Domestic borrowers 
D)  U.S.-based corporations

Question 11

In a typical international trade transaction, the:

Accepted Answer

A)  exporter should obtain a letter of credit to initiate transactions. 
B)  importer and exporter maintain an account with the same bank. 
C)  importer's bank sends a letter of credit to the exporter's bank. 
D)  importer's bank sends the draft and bill of lading to the exporter's bank.

Question 12

A _____ states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents.

Accepted Answer

A)  bill of exchange 
B)  bill of lading 
C)  letter of credit 
D)  bank statement

Question 13

The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a successful exporting strategy used by 3M?

Accepted Answer

A)  Add additional products once exporting becomes successful. 
B)  Enter many markets at one time to gain maximum exposure. 
C)  Bring in expert marketing specialists to promote the firm's products. 
D)  Enter on a large scale to flood the market.

Question 15

The _____ is issued to the exporter by the common carrier transporting the merchandise.

Accepted Answer

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

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.

Question 17

_____ denotes a whole range of barter-like agreements and its principle is to trade goods and services for other goods and services when they cannot be traded for money.

Accepted Answer

A)  Countertrade 
B)  Cross-selling 
C)  Matchmaking 
D)  Letter of credit

Question 18

The Export-Import Bank is an independent agency of the _____.

Accepted Answer

A)  European Union 
B)  World Trade Organization 
C)  United Nations 
D)  U.S. government

Question 19

_____ is primarily used for one-time-only deals in transactions with trading partners who are not creditworthy or trustworthy.

Accepted Answer

A)  Counterpurchase 
B)  Barter 
C)  Offset 
D)  Buyback

Question 20

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

Accepted Answer

A)  United States 
B)  European Union 
C)  ASEAN countries 
D)  Soviet Union and the Communist states of Eastern Europe

Exam 16: Exporting, Importing, and Countertrade