Question 1

Which of the following is a way in which the U.S.Department of Commerce helps potential exporters?

Accepted Answer

A)   It oversees volunteers with international trade experience and directs them to provide one-on-one counseling to active and new-to-export businesses.
B)   It assembles a "comparison shopping service" for 14 countries that are major markets for U.S. exports.
C)   It coordinates a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.
D)   It provides export specialists who act as the export marketing departments or international departments for their client firms.
E)   It starts exporting operations for firms until they are well established.F) C) and D)
G) None of the above

Question 2

A drawback of countertrade is that:

Accepted Answer

A)   it fails to enable firms to finance an export deal.
B)   it is detrimental to the economy of the importing country.
C)   developing nations have trouble raising the foreign exchange necessary to pay for imports.
D)   it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals.
E)   it may involve the exchange of poor-quality goods that cannot be disposed of profitably.F) C) and E)
G) All of the above

Question 3

The use of a specialized third-party trading house in a countertrade arrangement is known as _____.

Accepted Answer

A)   counterpurchase
B)   offset
C)   switch trading
D)   buyback
E)   barterF) C) and D)
G) A) and E)

Question 4

Which of the following is the first step in a typical international trade transaction?

Accepted Answer

A)   The exporter agrees to ship under a letter of credit and specifies relevant information such as prices and delivery terms.
B)   The importer applies to a trusted third party (usually a bank)  for a letter of credit to be issued in favor of the exporter for the merchandise the importer wishes to buy.
C)   The importer places an order with the exporter and asks the exporter if he would be willing to ship under a letter of credit.
D)   The exporter ships the goods to the importer on a common carrier. An official of the carrier gives the exporter a bill of lading.
E)   The trusted third party (usually a bank)  issues a letter of credit in the importer's favor and sends it to the exporter's bank.F) B) and D)
G) A) and D)

Question 5

For an importer,which of the following is a disadvantage of using a letter of credit for international transactions?

Accepted Answer

A)   It results in the importer losing control over the process of trading.
B)   It reduces the exporter's level of trust in the importer.
C)   It reduces the importer's ability to borrow funds for other purposes.
D)   It requires the importer to repay the loan even before the merchandise is sold.
E)   It is not issued at the importer's request.F) A) and B)
G) B) and E)

Question 6

What is an Ex-Im Bank? What is its mission and how does it pursue it?

Accepted Answer

The Export-Import Bank,often referred to...

Question 7

Which of the following types of countertrade is the simplest,although not common?

Accepted Answer

A)   Switch trading
B)   Counterpurchase
C)   Barter
D)   Offset
E)   BuybackF) B) and C)
G) A) and E)

Question 8

The _____ guarantees repayment of medium- and long-term loans U.S.commercial banks make to foreign borrowers for purchasing U.S.exports.

Accepted Answer

A)   United Nations
B)   Central Bank
C)   World Bank
D)   Ex-Im Bank
E)   Export Credit Insurance AssociationF) C) and D)
G) A) and B)

Question 9

The principle of countertrade is to trade goods and services for money.

Accepted Answer

A) True 
 B)False  False

Question 10

Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?

Accepted Answer

A)   Foreign Credit Insurance Association
B)   International Trade Administration
C)   Small Business Administration
D)   U.S. Department of Commerce
E)   U.S. Commercial ServiceF) C) and D)
G) A) and B)

Question 11

Which of the following is a strategic step taken to increase a firm's probability of exporting successfully?

Accepted Answer

A)   Avoiding the use of export management companies to contain costs
B)   Entering several markets simultaneously to hedge risk
C)   Entering a foreign market on a small scale
D)   Waiting for export opportunities
E)   Avoiding recruitment of local personnelF) A) and D)
G) A) and E)

Question 12

Which of the following is a disadvantage of a countertrade agreement?

Accepted Answer

A)   It does not allow firms to finance an export deal when other means are not available.
B)   It is unattractive to multinational companies due to its time-consuming and expensive nature.
C)   Firms prefer to be paid in hard currency.
D)   It is useful only for small companies.
E)   It requires exporting firms to obtain a letter of credit form a local bank.F) B) and D)
G) A) and B) C

Question 13

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Accepted Answer

Neophyte exporters tend to underestimate...

Question 14

Unlike their German and Japanese competitors,many U.S.firms do not have adequate information when they seek export opportunities.

Accepted Answer

A) True 
 B)False

Question 15

An advantage of _____ is that it helps in doing business in many developing nations that find it difficult to raise the foreign exchange necessary to pay for imports.

Accepted Answer

A)   mergers
B)   countertrade
C)   free trade
D)   arbitrage
E)   franchisingF) A) and B)
G) None of the above

Question 16

The advantage of export management companies is that they are experienced specialists that can help the neophyte exporter identify opportunities and avoid common pitfalls.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true of a letter of credit in international trade?

Accepted Answer

A)   No cash deposit or collateral is required from the importer.
B)   The exporter pays the trusted third party (usually a bank)  a fee for the service.
C)   It becomes a financial contract between the trusted third party (usually a bank)  and the exporter.
D)   It is issued by the exporter at the request of the importer.
E)   The creditworthiness of the importer is irrelevant when issuing a letter of credit.F) A) and B)
G) A) and C)

Question 18

Due to the complexity and diversity of foreign markets,firms sometimes hesitate to seek export opportunities.These firms can best overcome ignorance by:

Accepted Answer

A)   shortening production runs.
B)   creating revenue.
C)   outsourcing decisions.
D)   collecting information.
E)   lowering unit costs.F) A) and B)
G) A) and E)

Question 19

Which of the following is a characteristic of a time draft?

Accepted Answer

A)   It has no value given the deferred nature of the document.
B)   It is generally not preferred in international transactions.
C)   It is a negotiable instrument.
D)   It is also known as a bill of lading.
E)   It cannot be sold by an exporter.F) C) and D)
G) B) and E) C

Question 20

Which of the following drafts allows for a delay in payment?

Accepted Answer

A)   Sight draft
B)   Time draft
C)   Bill of lading
D)   Counterpurchase
E)   OffsetF) C) and D)
G) D) and E)

Exam 14: Exporting, Importing, and Countertrade

Which of the following is a way in which the U.S.Department of Commerce helps potential exporters?

Correct AnswerverifiedShow Answer

A drawback of countertrade is that:

Correct AnswerverifiedShow Answer

The use of a specialized third-party trading house in a countertrade arrangement is known as _____.

Correct AnswerverifiedShow Answer

Which of the following is the first step in a typical international trade transaction?

Correct AnswerverifiedShow Answer

For an importer,which of the following is a disadvantage of using a letter of credit for international transactions?

Correct AnswerverifiedShow Answer

What is an Ex-Im Bank? What is its mission and how does it pursue it?

Correct AnswerverifiedThe Export-Import Bank,often referred to...View AnswerShow Answer

Which of the following types of countertrade is the simplest,although not common?

Correct AnswerverifiedShow Answer

The _____ guarantees repayment of medium- and long-term loans U.S.commercial banks make to foreign borrowers for purchasing U.S.exports.

Correct AnswerverifiedShow Answer

The principle of countertrade is to trade goods and services for money.

Correct AnswerverifiedFalse

Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?

Correct AnswerverifiedShow Answer

Which of the following is a strategic step taken to increase a firm's probability of exporting successfully?

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of a countertrade agreement?

Correct AnswerverifiedC

Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?

Correct AnswerverifiedNeophyte exporters tend to underestimate...View AnswerShow Answer

Unlike their German and Japanese competitors,many U.S.firms do not have adequate information when they seek export opportunities.

Correct AnswerverifiedShow Answer

An advantage of _____ is that it helps in doing business in many developing nations that find it difficult to raise the foreign exchange necessary to pay for imports.

Correct AnswerverifiedShow Answer

The advantage of export management companies is that they are experienced specialists that can help the neophyte exporter identify opportunities and avoid common pitfalls.

Correct AnswerverifiedShow Answer

Which of the following is true of a letter of credit in international trade?

Correct AnswerverifiedShow Answer

Due to the complexity and diversity of foreign markets,firms sometimes hesitate to seek export opportunities.These firms can best overcome ignorance by:

Correct AnswerverifiedShow Answer

Which of the following is a characteristic of a time draft?

Correct AnswerverifiedC

Which of the following drafts allows for a delay in payment?

Correct AnswerverifiedShow Answer

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The Export-Import Bank,often referred to...
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False

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C

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Neophyte exporters tend to underestimate...
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C

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