Question 1

Describe the pros and cons of countertrade.

Accepted Answer

Countertrade's main attraction is that i...

Question 2

Compared to a decade ago,commercial banks and major accounting firms are rarely willing to assist small firms in starting export operations due to high default risks.

Accepted Answer

A) True 
 B)False

Question 3

Briefly describe the different types of countertrade arrangements.

Accepted Answer

The five distinct types of countertrade ...

Question 4

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

Question 5

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) B) and D)
G) All of the above

Question 6

Which of the following is true of exporting?

Accepted Answer

A)  Many foreign customers require face-to-face negotiations on their home turf.
B)  Large firms tend to wait for the world to come to them,rather than going out into the world to seek opportunities.
C)  Exporters have the advantage of reduced paperwork and fewer formalities.
D)  Medium-sized and small firms are proactive about seeking opportunities for profitable exporting.
E)  Firms that focus only on exporting often lose out on significant opportunities for growth and cost reduction.F) C) and E)
G) C) and D)

Question 7

In international commerce,time drafts are negotiable instruments.

Accepted Answer

A) True 
 B)False

Question 8

What does the term sogo shosha mean? How do they help Japanese exporters and what role do they play in countertrade?

Accepted Answer

Sogo shosha are Japan's great trading ho...

Question 9

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer,it serves as a

Accepted Answer

A)  document of title.
B)  contract.
C)  receipt.
D)  time draft.
E)  collateral.F) All of the above
G) A) and E)

Question 10

Jamal Steel,a rapidly growing small steel company with annual revenues of $8 million is looking to buy a large industrial furnace from Japan that is expected to cost $2 million.The exporter wants Jamal Steel to produce a letter of credit.Jamal Steel's CFO is reluctant to do so.Which of the following disadvantages of using a letter of credit for international transactions is likely the reason for the CFO's reluctance?

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

Question 11

When a time draft is drawn on and accepted by a bank,it is known as a

Accepted Answer

A)  trade acceptance.
B)  banker's check.
C)  banker's acceptance.
D)  bill of lading.
E)  letter of credit.F) All of the above
G) A) and E)

Question 12

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.This type of countertrade is called a(n)

Accepted Answer

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

Question 13

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)  compensation.F) A) and D)
G) A) and E)

Question 14

Briefly describe the strategic steps that novice exporters can take to increase the probability of exporting successfully.

Accepted Answer

The probability of exporting successfull...

Question 15

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.To convince the CEO,Bloom should point out that 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 E)
G) D) and E)

Question 16

Unhappy with the speed with which the company's export initiative was going,the CEO called Mary Adams,the person in charge of exports at Ambient Products,to understand the reasons for the company's delay.Which of the following is a valid defense that Mary Adams can use?

Accepted Answer

A)  The U.S.government does not provide any help for exporters.
B)  Novice exporters tend to overestimate the time required to cultivate business in foreign countries.
C)  Exporters often face voluminous paperwork,complex formalities,and many potential delays and errors.
D)  Small firms are usually familiar with foreign market opportunities.
E)  Large firms do not consider exporting until their domestic market is saturated.F) B) and E)
G) A) and D)

Question 17

What are export management companies? What are their advantages and disadvantages?

Accepted Answer

Export management companies (EMCs)are ex...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

Exam 14: Exporting, Importing, and Countertrade

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.To convince the CEO,Bloom should point out that firms that do not export often

Correct Answer
verified

What does the term sogo shosha mean? How do they help Japanese exporters and what role do they play in countertrade?

Correct Answer
verified
Sogo shosha are Japan's great trading ho...
View Answer

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

Correct Answer
verified

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.This type of countertrade is called a(n)

Correct Answer
verified

When a time draft is drawn on and accepted by a bank,it is known as a

Correct Answer
verified

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer,it serves as a

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
verified

Briefly describe the different types of countertrade arrangements.

Correct Answer
verified
The five distinct types of countertrade ...
View Answer

Countertrade occurs when the

Correct Answer
verified

Which of the following is true of exporting?

Correct Answer
verified

Briefly describe the strategic steps that novice exporters can take to increase the probability of exporting successfully.

Correct Answer
verified
The probability of exporting successfull...
View Answer

Correct Answer
verified

Compared to a decade ago,commercial banks and major accounting firms are rarely willing to assist small firms in starting export operations due to high default risks.

Correct Answer
verified

Unhappy with the speed with which the company's export initiative was going,the CEO called Mary Adams,the person in charge of exports at Ambient Products,to understand the reasons for the company's delay.Which of the following is a valid defense that Mary Adams can use?

Correct Answer
verified

Correct Answer
verified

Describe the pros and cons of countertrade.

Correct Answer
verified
Countertrade's main attraction is that i...
View Answer

In international commerce,time drafts are negotiable instruments.

Correct Answer
verified

What are export management companies? What are their advantages and disadvantages?

Correct Answer
verified
Export management companies (EMCs)are ex...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

Exam 14: Exporting, Importing, and Countertrade

Darren Bloom,the sales manager for John Fountain Products,a small family business,is eager to get the company on an export path.The CEO of the company is not convinced,however.To convince the CEO,Bloom should point out that firms that do not export often

Correct AnswerverifiedShow Answer

What does the term sogo shosha mean? How do they help Japanese exporters and what role do they play in countertrade?

Correct AnswerverifiedSogo shosha are Japan's great trading ho...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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.This type of countertrade is called a(n)

Correct AnswerverifiedShow Answer

When a time draft is drawn on and accepted by a bank,it is known as a

Correct AnswerverifiedShow Answer

When a bill of lading is used to obtain payment or a written promise of payment before the merchandise is released to the importer,it serves as a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Briefly describe the different types of countertrade arrangements.

Correct AnswerverifiedThe five distinct types of countertrade ...View AnswerShow Answer

Countertrade occurs when the

Correct AnswerverifiedShow Answer

Which of the following is true of exporting?

Correct AnswerverifiedShow Answer

Briefly describe the strategic steps that novice exporters can take to increase the probability of exporting successfully.

Correct AnswerverifiedThe probability of exporting successfull...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Compared to a decade ago,commercial banks and major accounting firms are rarely willing to assist small firms in starting export operations due to high default risks.

Correct AnswerverifiedShow Answer

Unhappy with the speed with which the company's export initiative was going,the CEO called Mary Adams,the person in charge of exports at Ambient Products,to understand the reasons for the company's delay.Which of the following is a valid defense that Mary Adams can use?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Describe the pros and cons of countertrade.

Correct AnswerverifiedCountertrade's main attraction is that i...View AnswerShow Answer

In international commerce,time drafts are negotiable instruments.

Correct AnswerverifiedShow Answer

What are export management companies? What are their advantages and disadvantages?

Correct AnswerverifiedExport management companies (EMCs)are ex...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Sogo shosha are Japan's great trading ho...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The five distinct types of countertrade ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The probability of exporting successfull...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Countertrade's main attraction is that i...
View Answer

Correct Answer
verified

Correct Answer
verified
Export management companies (EMCs)are ex...
View Answer

Correct Answer
verified

Correct Answer
verified