Question 1

One drawback of a countertrade agreement is that

Accepted Answer

A)   it fails to give firms a way to finance an export deal.
B)   it requires an in-house trading department to be maintained, which can be expensive and time-consuming.
C)   it is detrimental to the economy of the importing country.
D)   developing nations may have trouble raising the foreign exchange necessary to pay for imports.
E)   it is not an acceptable means of trading in most developing countries.F) D) and E)
G) A) and B)

Question 2

What is a characteristic of countertrade?

Accepted Answer

A)   The governments of developing nations sometimes insist on a certain amount of countertrade.
B)   Countertrade is a means of structuring an international sale when conventional means of payment are cost-effective.
C)   Nonconvertibility is an advantage for exporters.
D)   Nonconvertibility implies that the exporter will be paid only in his or her home currency.
E)   Most exporters desire payment in a currency that is not convertible.F) A) and D)
G) A) and C)

Question 3

Compare and contrast the experience of exporting for U.S. firms with that of German and Japanese firms.

Accepted Answer

German and Japanese firms can draw on th...

Question 4

The direct exchange of goods and/or services between two parties without a cash transaction is referred to as

Accepted Answer

A)   switch trading.
B)   counterpurchase.
C)   barter.
D)   offset.
E)   buyback.F) None of the above
G) A) and B)

Question 5

Rather than use cash, Indonesia traded textiles with the United States in exchange for corn. This is an example of which form of countertrade?

Accepted Answer

A)   switch trading
B)   counterpurchase
C)   buyback
D)   barter
E)   offsetF) A) and E)
G) C) and D)

Question 6

Repayment of medium- and long-term loans that U.S. commercial banks make to foreign borrowers for purchasing U.S. exports is guaranteed by the

Accepted Answer

A)   Federal Deposit Insurance Corporation.
B)   Central Bank.
C)   World Bank.
D)   Ex-Im Bank.
E)   Export Credit Insurance Association.F) A) and E)
G) C) and E)

Question 7

Reactive firms do not consider exporting until their domestic market is saturated.

Accepted Answer

A) True 
 B)False

Question 8

Manuel, the CEO of Gilson Products, a small manufacturer of office furniture, is going abroad along with representatives of the U.S. Department of Commerce and other U.S. businesspeople to meet with qualified agents, distributors, and customers. Manuel is most likely participating in the

Accepted Answer

A)   matchmaker program.
B)   "best prospects" listing.
C)   SCORE program.
D)   "comparison shopping service."
E)   export-import program.F) D) and E)
G) A) and E)

Question 9

What is an accurate assessment when comparing exports of Germany, Japan, and the United States?

Accepted Answer

A)   Historically, only the United States has made its living as a trading nation.
B)   Germany and Japan are relatively self-contained continental economies in which international trade played a minor role.
C)   Unlike Japan or Germany, U.S. firms have a strong information advantage when they seek export opportunities.
D)   The United States has not yet evolved an institutional structure for promoting exports similar to that of Germany or Japan.
E)   The Ministry of International Trade and Industry (MITI)  in the United States is always on the lookout for export opportunities. There is no such organization elsewhere.F) B) and E)
G) None of the above

Question 10

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Accepted Answer

A)   switch trade.
B)   offset.
C)   buyback.
D)   arbitrage.
E)   barter.F) B) and C)
G) A) and B)

Question 11

A draft instructs the exporter to ship product.

Accepted Answer

A) True 
 B)False

Question 12

Jamal Steel, a rapidly growing small steel company with annual revenues of $8 million, is looking to buy a large industrial furnace from Shinto Manufacturing, a Japan-based company. Rather than have a letter of credit binding the two parties, both agree on a draft. In international commerce, Shinto Manufacturing, the party initiating the draft, is known as the

Accepted Answer

A)   maker.
B)   drawee.
C)   buyer
D)   agent.
E)   drafter.F) None of the above
G) C) and E)

Question 13

A lack of trust between two parties engaged in international trade can be exacerbated by the

Accepted Answer

A)   saturation of the domestic market.
B)   similar preferences of the parties regarding how a transaction should be configured.
C)   narrowing distance between the two parties due to technological advances.
D)   problems of using an underdeveloped international legal system to enforce contractual obligations.
E)   possibility of doing business with someone with whom they have been associated for a long time.F) B) and D)
G) All of the above

Question 14

The Foreign Credit Insurance Association (FCIA)  is an association of private commercial institutions operating under the guidance of the

Accepted Answer

A)   Federal Mediation and Conciliation Service.
B)   U.S. Department of Commerce.
C)   Export-Import Bank.
D)   International Trade Administration.
E)   Ministry of International Trade and Industry.F) D) and E)
G) B) and D)

Question 15

Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in

Accepted Answer

A)   easy tracking of the parties involved.
B)   a lack of trust between the parties.
C)   strict enforcement of contractual obligations.
D)   rapid acculturation.
E)   better understanding of how transactions should be configured.F) C) and D)
G) C) and E)

Question 16

When seeking opportunities for profitable exporting, large firms generally tend to be

Accepted Answer

A)   passive.
B)   risk averse.
C)   wary.
D)   proactive.
E)   neutral.F) None of the above
G) B) and D)

Question 17

How do international and domestic practices of settling trade transactions differ?

Accepted Answer

A)   In an international transaction, a formal promise to pay is required before the buyer can obtain the merchandise.
B)   In an international transaction, the seller usually ships merchandise on an open account.
C)   In a domestic transaction, a draft is used to settle trade transactions.
D)   In an international transaction, the exporter sends a commercial invoice that specifies the amount due and terms of payment to the importer.
E)   In an international transaction, there is more trust between the exporter and the importer than in a domestic transaction.F) D) and E)
G) C) and D)

Question 18

Pro-Racquets has a bill of lading for an order of 10,000 tennis rackets it will be exporting to a foreign distributor. The company takes this bill of lading to the local bank and uses it to obtain funds to hold the company over until final payment is received from the foreign distributor. In this situation, the bill of lading is being used as

Accepted Answer

A)   collateral.
B)   licensing.
C)   a draft.
D)   a contract.
E)   a receipt.F) C) and D)
G) A) and B)

Question 19

In terms of exporting, what can be said of medium-sized and small firms?

Accepted Answer

A)   They are proactive about seeking opportunities for profitable exporting.
B)   They consider exporting only after their domestic market is saturated.
C)   They are not intimidated by the complexities of foreign legal systems.
D)   They have a high degree of familiarity with foreign market opportunities.
E)   They explore foreign markets to find opportunities for leveraging their technology.F) A) and B)
G) A) and E)

Question 20

As an exporter, Horizon Trading wants to be paid before a consignment is shipped. Correspondingly, its importer in Italy, Friggo Imports, wants to pay only upon receipt of the consignment. These conflicting preferences of Horizon Trading and Friggo Imports are most likely a manifestation of

Accepted Answer

A)   corporate greed.
B)   acculturation.
C)   lack of trust.
D)   cultural insensitivity.
E)   countertrading opportunities.F) A) and C)
G) A) and B)

Exam 14: Exporting, Importing, and Countertrade

Repayment of medium- and long-term loans that U.S. commercial banks make to foreign borrowers for purchasing U.S. exports is guaranteed by the

Correct Answer
verified

What is a characteristic of countertrade?

Correct Answer
verified

What is an accurate assessment when comparing exports of Germany, Japan, and the United States?

Correct Answer
verified

Correct Answer
verified

A lack of trust between two parties engaged in international trade can be exacerbated by the

Correct Answer
verified

Correct Answer
verified

Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in

Correct Answer
verified

The Foreign Credit Insurance Association (FCIA) is an association of private commercial institutions operating under the guidance of the

Correct Answer
verified

A draft instructs the exporter to ship product.

Correct Answer
verified

Reactive firms do not consider exporting until their domestic market is saturated.

Correct Answer
verified

Compare and contrast the experience of exporting for U.S. firms with that of German and Japanese firms.

Correct Answer
verified
German and Japanese firms can draw on th...
View Answer

In terms of exporting, what can be said of medium-sized and small firms?

Correct Answer
verified

Manuel, the CEO of Gilson Products, a small manufacturer of office furniture, is going abroad along with representatives of the U.S. Department of Commerce and other U.S. businesspeople to meet with qualified agents, distributors, and customers. Manuel is most likely participating in the

Correct Answer
verified

How do international and domestic practices of settling trade transactions differ?

Correct Answer
verified

When seeking opportunities for profitable exporting, large firms generally tend to be

Correct Answer
verified

One drawback of a countertrade agreement is that

Correct Answer
verified

As an exporter, Horizon Trading wants to be paid before a consignment is shipped. Correspondingly, its importer in Italy, Friggo Imports, wants to pay only upon receipt of the consignment. These conflicting preferences of Horizon Trading and Friggo Imports are most likely a manifestation of

Correct Answer
verified

The direct exchange of goods and/or services between two parties without a cash transaction is referred to as

Correct Answer
verified

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Correct Answer
verified

Rather than use cash, Indonesia traded textiles with the United States in exchange for corn. This is an example of which form of countertrade?

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

Repayment of medium- and long-term loans that U.S. commercial banks make to foreign borrowers for purchasing U.S. exports is guaranteed by the

Correct AnswerverifiedShow Answer

What is a characteristic of countertrade?

Correct AnswerverifiedShow Answer

What is an accurate assessment when comparing exports of Germany, Japan, and the United States?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A lack of trust between two parties engaged in international trade can be exacerbated by the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in

Correct AnswerverifiedShow Answer

The Foreign Credit Insurance Association (FCIA) is an association of private commercial institutions operating under the guidance of the

Correct AnswerverifiedShow Answer

A draft instructs the exporter to ship product.

Correct AnswerverifiedShow Answer

Reactive firms do not consider exporting until their domestic market is saturated.

Correct AnswerverifiedShow Answer

Compare and contrast the experience of exporting for U.S. firms with that of German and Japanese firms.

Correct AnswerverifiedGerman and Japanese firms can draw on th...View AnswerShow Answer

In terms of exporting, what can be said of medium-sized and small firms?

Correct AnswerverifiedShow Answer

Manuel, the CEO of Gilson Products, a small manufacturer of office furniture, is going abroad along with representatives of the U.S. Department of Commerce and other U.S. businesspeople to meet with qualified agents, distributors, and customers. Manuel is most likely participating in the

Correct AnswerverifiedShow Answer

How do international and domestic practices of settling trade transactions differ?

Correct AnswerverifiedShow Answer

When seeking opportunities for profitable exporting, large firms generally tend to be

Correct AnswerverifiedShow Answer

One drawback of a countertrade agreement is that

Correct AnswerverifiedShow Answer

As an exporter, Horizon Trading wants to be paid before a consignment is shipped. Correspondingly, its importer in Italy, Friggo Imports, wants to pay only upon receipt of the consignment. These conflicting preferences of Horizon Trading and Friggo Imports are most likely a manifestation of

Correct AnswerverifiedShow Answer

The direct exchange of goods and/or services between two parties without a cash transaction is referred to as

Correct AnswerverifiedShow Answer

A buying agreement where the exporting country can fulfill the agreement with any firm in the country to which the sale is being made is called a(n)

Correct AnswerverifiedShow Answer

Rather than use cash, Indonesia traded textiles with the United States in exchange for corn. This is an example of which form of countertrade?

Correct AnswerverifiedShow Answer

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German and Japanese firms can draw on th...
View Answer

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verified

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Correct Answer
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