Question 1

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Accepted Answer

A) True 
 B)False

Question 2

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

Accepted Answer

A)  delivering the goods immediately.
B)  paying the draft amount immediately.
C)  providing a collateral for the amount specified in the bill.
D)  writing or stamping a notice of acceptance on its face.
E)  selling the draft to an investor at a discount from its face value.F) A) and D)
G) B) and E)

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)  barter.F) B) and E)
G) C) and D)

Question 4

Which of the following drafts is payable on presentation to the drawee?

Accepted Answer

A)  Bill of lading
B)  Sight draft
C)  Letter of credit
D)  Time draft
E)  OffsetF) All of the above
G) C) and E) B

Question 5

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 E)
G) A) and D)

Question 6

Japan's great trading houses are referred to as:

Accepted Answer

A)  kaizen.
B)  sogo shosha.
C)  zaibatsu.
D)  guanxi.
E)  kanban.F) C) and D)
G) D) and E)

Question 7

Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer?

Accepted Answer

A)  Bill of lading
B)  Time draft
C)  Letter of credit
D)  Sight draft
E)  Bill of exchangeF) A) and D)
G) A) and C)

Question 8

In international commerce, a sight draft allows for a delay in payment.

Accepted Answer

A) True 
 B)False

Question 9

The sogo shosha of Japan:

Accepted Answer

A)  proactively and continuously seek export opportunities for their affiliated companies.
B)  exclusively serve the largest and most prestigious companies in Japan.
C)  have offices concentrated in the business district of Tokyo.
D)  have monopolized the export market in the country.
E)  consider export only when there is excess production at home.F) A) and B)
G) D) and E)

Question 10

What is the difference between a sight draft and a time draft?

Accepted Answer

A sight draft is payable on presentation...

Question 11

A lack of trust between two parties engaged in international trade is 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) A) and B)
G) A) and C)

Question 12

While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Accepted Answer

A) True 
 B)False

Question 13

Only large companies have benefited significantly from the moneymaking opportunities of exporting.

Accepted Answer

A) True 
 B)False

Question 14

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Accepted Answer

A)  countertrade.
B)  carry trade.
C)  free trade.
D)  counter sale.
E)  countervailing duty.F) A) and C)
G) B) and E)

Question 15

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) B) and C)
G) A) and C)

Question 16

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

Accepted Answer

A) True 
 B)False

Question 17

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

Accepted Answer

A) True 
 B)False  True

Question 18

A firm sells some products to a foreign country. The foreign country pays the firm in dollars but in exchange the firm agrees to spend some of the proceeds from the sale on textiles produced by the foreign country. In which of the following types of countertrade arrangement are the two parties engaged?

Accepted Answer

A)  Switch trading
B)  Buyback
C)  Counterpurchase
D)  Barter
E)  CompensationF) A) and C)
G) C) and D) C

Question 19

Which of the following is an advantage of exporting?

Accepted Answer

A)  It helps in easy currency conversion.
B)  It provides large revenue and profit opportunities.
C)  It reduces the administrative costs incurred by a company.
D)  It helps companies increase their unit costs.
E)  It reduces paperwork and complex formalities.F) D) and E)
G) C) and D)

Question 20

Which of the following is true 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) C) and D)
G) All of the above

Exam 14: Exporting, Importing, and Countertrade

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Correct Answer
verified

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

Correct Answer
verified

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

Correct Answer
verified

Which of the following drafts is payable on presentation to the drawee?

Correct Answer
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B

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

Correct Answer
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Japan's great trading houses are referred to as:

Correct Answer
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Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer?

Correct Answer
verified

In international commerce, a sight draft allows for a delay in payment.

Correct Answer
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The sogo shosha of Japan:

Correct Answer
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What is the difference between a sight draft and a time draft?

Correct Answer
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A sight draft is payable on presentation...
View Answer

A lack of trust between two parties engaged in international trade is exacerbated by the:

Correct Answer
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While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Correct Answer
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Only large companies have benefited significantly from the moneymaking opportunities of exporting.

Correct Answer
verified

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Correct Answer
verified

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

Correct Answer
verified

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

Correct Answer
verified

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

Correct Answer
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True

Correct Answer
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C

Which of the following is an advantage of exporting?

Correct Answer
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Which of the following is true of countertrade?

Correct Answer
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Exam 14: Exporting, Importing, and Countertrade

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Correct AnswerverifiedShow Answer

When a time draft is presented to a drawee, he or she signifies acceptance of it by:

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 drafts is payable on presentation to the drawee?

Correct AnswerverifiedB

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

Correct AnswerverifiedShow Answer

Japan's great trading houses are referred to as:

Correct AnswerverifiedShow Answer

Which of the following stands at the center of international commercial transactions and is issued by a bank at the request of an importer?

Correct AnswerverifiedShow Answer

In international commerce, a sight draft allows for a delay in payment.

Correct AnswerverifiedShow Answer

The sogo shosha of Japan:

Correct AnswerverifiedShow Answer

What is the difference between a sight draft and a time draft?

Correct AnswerverifiedA sight draft is payable on presentation...View AnswerShow Answer

A lack of trust between two parties engaged in international trade is exacerbated by the:

Correct AnswerverifiedShow Answer

While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.

Correct AnswerverifiedShow Answer

Only large companies have benefited significantly from the moneymaking opportunities of exporting.

Correct AnswerverifiedShow Answer

A range of barterlike agreements by which goods and services are traded for other goods and services when they cannot be traded for money is known as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.

Correct AnswerverifiedShow Answer

Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.

Correct AnswerverifiedTrue

Correct AnswerverifiedC

Which of the following is an advantage of exporting?

Correct AnswerverifiedShow Answer

Which of the following is true of countertrade?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A sight draft is payable on presentation...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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True

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C

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Correct Answer
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