glb ch 16

Which of the following statements about the SBA is false? a. It is the most comprehensive source of export opportunities information. b. It employs 10 regional international trade officers throughout the United States. c. It employs a 10-person international trade staff in Washington, D.C. d. It oversees some 850 volunteers to provide one-on-one counseling to active and new-to-export businesses.

a. It is the most comprehensive source of export opportunities information.

In a letter of credit transaction, the importer secures the letter of credit a. before product shipment. b. after product shipment. c. from the exporter's bank. d. after receiving the product.

a. before product shipment.

Through its _____ program, the SBA oversees some 850 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses. a. EMC b. SCORE c. ELAN d. International Trade Administration

b. SCORE

For U.S. firms, the most comprehensive source of export opportunities information is the: a. Small Business Administration. b. U.S. Department of Commerce. c. Federal Trade Commission. d. foreign embassy.

b. U.S. Department of Commerce.

In a letter of credit transaction, the exporter receives its payment from a. the importer. b. the importer's bank. c.the exporter's bank. d.the government.

b. the importer's bank.

A _____ allows for a delay in payment. a. bill of lading b. time draft c. banker's acceptance d. sight draft

b. time draft

A firm can increase the probability of exporting successfully by taking which of these steps? a. Avoiding hiring EMCs to lower head counts b. Hiring only home country personnel to build commitment c. Entering on a small scale d. Waiting for the export opportunities to come

c. Entering on a small scale

What is the biggest advantage of using a letter of credit system? a. The exporter is guaranteed pre-export financing. b. It allows the importer time to resell the merchandise before requiring payment. c. The trust is established, for the importer and exporter, because of a reputable bank. d. It guarantees the importer extra funds for other purposes.

c. The trust is established, for the importer and exporter, because of a reputable bank.

Which of the following helps explain why exporters still account for only a tiny percentage of U.S. firms? a. Lack of export opportunities; buoyant demand within U.S. b. Tariffs; FDI restrictions c. Unfamiliarity; intimidation by the complexities d. Regulatory burden; barriers to free trade

c. Unfamiliarity; intimidation by the complexities

When conventional means of payment are difficult, costly, or nonexistent, a firm is more likely to use: a. a letter of credit. b. a time draft. c. countertrade. d. a sight draft.

c. countertrade.

A _____ is payable on presentation to the drawee. a. time draft b. bill of lading c. sight draft d. trade acceptance

c. sight draft

One drawback of relying on EMCs is that: a. they are not conversant with the ins and outs of the exporting process. b. they have no knowledge of different business mores. c. the company can fail to develop its own exporting capabilities. d. the company is unable to avoid common pitfalls.

c. the company can fail to develop its own exporting capabilities.

In theory, the advantage of EMCs is that they: a. provide export subsides to the exporting firms. b. are not-for-profit organizations, hence provide free service. c. are subsidized by the Department of Commerce. d. are experienced specialists who can help the neophyte exporter.

d. are experienced specialists who can help the neophyte exporter.

A bill of lading: a. is the same as a letter of credit. b. is received from the importer prior to product shipment. c. is a financial note issued by a bank. d. gives title to the goods.

d. gives title to the goods.

A firm that uses a specialized third-party trading house in a countertrade arrangement is involved in: a. a barter. b. a counter purchase. c. an offset. d. switch trading.

d. switch trading.

A key challenge facing export and import financing is: a. limited market opportunities. b. lack of export assistance. c. lack of qualified EMCs. d. the lack of trust.

d. the lack of trust.