Question 1

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) All of the above
G) C) and E)

Question 2

Which of the following is a common pitfall that novice exporters come across?

Accepted Answer

A)   Poor understanding of the opportunities in the domestic market
B)   Low unit costs
C)   Increased economies of scale
D)   Problems securing financing
E)   Familiar distribution systemsF) A) and C)
G) A) and B)

Question 3

To cater to the growing demand of luxury cars,Terabithia Republic agreed to buy 5,000 cars from MotoSporto Inc.in exchange for 5,000 gallons of oil.Due to a lack of trust,Terabithia decided to make it a one-time-only deal.Which of the following forms of countertrade is the country most likely to use?

Accepted Answer

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

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

Question 5

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 dutyF) A) and E)
G) B) and C)

Question 6

Which of the following is true of the export performance of the United States,Germany,and Japan?

Accepted Answer

A)   Historically, the United States has made its living as a trading nation.
B)   Germany has been a relatively self-contained continental economy in which international trade played a minor role.
C)   Unlike Japan, 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.
E)   The Ministry of International Trade and Industry (MITI)  in the United States is always on the lookout for export opportunities.F) D) and E)
G) B) and E)

Question 7

A firm concludes a counterpurchase agreement with a foreign country for which it receives some counterpurchase credits for purchasing its goods.The firm does not want any foreign goods,however,so it sells the credits to a third-party trading house at a discount.The trading house finds a firm that can use the credits and sells them at a profit.This is an example of _____.

Accepted Answer

A)   barter
B)   switch trading
C)   an offset
D)   a buyback
E)   compensationF) D) and E)
G) C) and E)

Question 8

In international commerce,a _____ refers to an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.

Accepted Answer

A)   bill of lading
B)   draft
C)   letter of credit
D)   counterpurchase
E)   buybackF) A) and B)
G) A) and C)

Question 9

A firm that enters many markets at once:

Accepted Answer

A)   runs the risk of spreading its limited management resources too thin.
B)   becomes established in all the markets.
C)   gets the time to learn about each market.
D)   has fewer export opportunities.
E)   reduces the costs of any subsequent failure.F) A) and B)
G) All of the above

Question 10

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 E)
G) A) and B)

Question 11

Large firms generally tend to be _____ about seeking opportunities for profitable exporting.

Accepted Answer

A)   passive
B)   risk averse
C)   wary
D)   proactive
E)   neutralF) C) and D)
G) B) and D)

Question 12

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

Accepted Answer

A sight draft is payable on presentation...

Question 13

Which of the following is true of the International Trade Administration and the U.S.Commercial Service?

Accepted Answer

A)   They are private organizations that assist U.S. exporters.
B)   They are the great trading houses of the United States.
C)   They are organizations within the U.S. Department of Commerce.
D)   They are departments in the Small Business Administration.
E)   They are global export management companies.F) C) and D)
G) A) and B)

Question 14

The mission of the Foreign Credit Insurance Association is to provide financing aid that will facilitate exports,imports,and the exchange of commodities between the United States and other countries.

Accepted Answer

A) True 
 B)False

Question 15

Countertrade occurs when the:

Accepted Answer

A)   exporter may not be paid in his or her home currency due to nonconvertibility.
B)   exporter can convert the currency only in U.S. dollars.
C)   exporter is dealing with a country that has huge foreign reserves.
D)   exporter has easy access to export credit to fund its international trade.
E)   importer defaults on payment.F) C) and D)
G) A) and B)

Question 16

Commercial banks and major accounting firms are less willing to assist small firms in starting export operations due to higher default risks.

Accepted Answer

A) True 
 B)False

Question 17

Firms that do not export often:

Accepted Answer

A)   face problems of currency conversion.
B)   lose out on significant opportunities for cost reduction.
C)   are able to reduce their unit costs.
D)   are not intimidated by the business practices of foreign countries.
E)   explore foreign markets to see where they can leverage their technology.F) A) and D)
G) A) and C)

Question 18

An exporter has to forgo a letter of credit when:

Accepted Answer

A)   competing exporters also require letters of credit.
B)   the importer is facing stiff competition from other importers.
C)   the exporter is a dominant player in a noncompetitive market.
D)   the importer is in a strong bargaining position.
E)   he or she knows that the importer will default on payment.F) B) and E)
G) None of the above

Question 19

_____,a type of countertrade,occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Accepted Answer

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

Question 20

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

Exam 14: Exporting, Importing, and Countertrade

A firm that enters many markets at once:

Correct Answer
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Which of the following is a common pitfall that novice exporters come across?

Correct Answer
verified

Correct Answer
verified

Which of the following is true of the International Trade Administration and the U.S.Commercial Service?

Correct Answer
verified

_____,a type of countertrade,occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Correct Answer
verified

In international commerce,a _____ refers to an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.

Correct Answer
verified

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

Correct Answer
verified

Which of the following is true of the export performance of the United States,Germany,and Japan?

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

Commercial banks and major accounting firms are less willing to assist small firms in starting export operations due to higher default risks.

Correct Answer
verified

Correct Answer
verified

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

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

An exporter has to forgo a letter of credit when:

Correct Answer
verified

Firms that do not export often:

Correct Answer
verified

The mission of the Foreign Credit Insurance Association is to provide financing aid that will facilitate exports,imports,and the exchange of commodities between the United States and other countries.

Correct Answer
verified

Countertrade occurs when the:

Correct Answer
verified

Correct Answer
verified

The sogo shosha of Japan:

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

Large firms generally tend to be _____ about seeking opportunities for profitable exporting.

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

A firm that enters many markets at once:

Correct AnswerverifiedShow Answer

Which of the following is a common pitfall that novice exporters come across?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is true of the International Trade Administration and the U.S.Commercial Service?

Correct AnswerverifiedShow Answer

_____,a type of countertrade,occurs when a third-party trading house buys the firm's counterpurchase credits and sells them to another firm that can better use them.

Correct AnswerverifiedShow Answer

In international commerce,a _____ refers to an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is true of the export performance of the United States,Germany,and Japan?

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

Commercial banks and major accounting firms are less willing to assist small firms in starting export operations due to higher default risks.

Correct AnswerverifiedShow Answer

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

An exporter has to forgo a letter of credit when:

Correct AnswerverifiedShow Answer

Firms that do not export often:

Correct AnswerverifiedShow Answer

The mission of the Foreign Credit Insurance Association is to provide financing aid that will facilitate exports,imports,and the exchange of commodities between the United States and other countries.

Correct AnswerverifiedShow Answer

Countertrade occurs when the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The sogo shosha of Japan:

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

Large firms generally tend to be _____ about seeking opportunities for profitable exporting.

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