Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Japan's great trading houses are called ____.

Accepted Answer

A)  sogo shosha 
B)  kaizen 
C)  MITI 
D)  Samurai

Question 3

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

Question 4

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 5

Japan's great trading houses are called Samurai houses.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

Poor understanding of competitive conditions in the foreign market is a common problem facing exporters.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true of exporting?

Accepted Answer

A)  It increases the trade deficit that nations have. 
B)  Exporting leads to diseconomies of scope. 
C)  It helps a firm achieve economies of scale. 
D)  Exporting is not beneficial to a country's economy.

Question 10

Which of the following statements is true of countertrade?

Accepted Answer

A)  Countertrade reduces the profitability of competing firms and is considered an unethical practice. 
B)  Countertrade is a conventional means to pay exporters. 
C)  Smaller organizations commonly use countertrade in international transactions. 
D)  Countertrade occurs when goods and services are traded for other goods and services.

Question 11

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 12

An importer obtains a letter of credit from a bank in the exporter's country in a typical international transaction.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Countertrade's main attraction is that it can give a firm a way to finance an export deal when there are no other means available.

Accepted Answer

A) True 
 B)False

Question 15

A draft is the instrument normally used in international commerce to effect payment.

Accepted Answer

A) True 
 B)False

Question 16

The bill of lading does not serve as a document of title as such.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the disadvantages of countertrade.

Accepted Answer

The answer of Discuss the disadvantages of countertrade....

Question 18

What is an export management company? What are its advantages and disadvantages?

Accepted Answer

The answer of What is an export management company? What...

Question 19

_____ 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 20

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?

Accepted Answer

The answer of Describe the process involved in financing imports...

Exam 16: Exporting, Importing, and Countertrade

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

Japan's great trading houses are called ____.

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.

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.

Japan's great trading houses are called Samurai houses.

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

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

Poor understanding of competitive conditions in the foreign market is a common problem facing exporters.

Which of the following statements is true of exporting?

Which of the following statements is true of countertrade?

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

An importer obtains a letter of credit from a bank in the exporter's country in a typical international transaction.

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

Countertrade's main attraction is that it can give a firm a way to finance an export deal when there are no other means available.

A draft is the instrument normally used in international commerce to effect payment.

The bill of lading does not serve as a document of title as such.

Discuss the disadvantages of countertrade.

What is an export management company? What are its advantages and disadvantages?

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

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?