INB 450 chapter 14

Which of the following is true of a draft? A) It is an order written by an exporter telling an importer what and when to pay. B) It is issued by a bank at the request of an importer. C) It is sometimes referred to as a bill of lading. D) It serves as a receipt, as a contract, and as a document of title. E) It facilitates an exporter to obtain pre-export financing.

A) It is an order written by an exporter telling an importer what and when to pay.

Which of the following is a drawback of countertrade? A) It may involve the exchange of poor-quality goods that the firm cannot dispose of profitably. B) It is detrimental to the economy of the exporting country. C) It fails to give firms a way to finance an export deal. D) Only large companies can engage in countertrade. E) It is not an option when doing business in developing countries.

A) It may involve the exchange of poor-quality goods that the firm cannot dispose of profitably.

BigTire Company, a U.S.-based car manufacturer, sold cars to the country of Bealand. Bealand paid BigTire Company in dollars, but in exchange, BigTire Company agreed to spend some of its proceeds from the sale on electronic equipment produced by Bealand. Which type of countertrade arrangement does this example illustrate? A) buyback B) couterpurchase C) barter D) offset E) switch trading

B) couterpurchase

Which of the following is an arrangement whereby one firm distributes another firm's products? A) buyback B) piggyback marketing C) barter D) offset E) switch trading

B) piggyback marketing

In the context of seeking export opportunities, which of the following is true of large firms? A) They are intimidated by the complexities and mechanics of exporting to foreign countries. B) They do not consider exporting until after their domestic market is saturated. C) They systematically scan foreign markets to see where the opportunities lie. D) They hesitate to seek export opportunities because they do not know how big the opportunities actually are. E) They tend to be reactive about seeking opportunities for profitable exporting.

C) They systematically scan foreign markets to see where the opportunities lie.

Which of the following is viewed as the most restrictive countertrade arrangement? A) switch trading B) couterpurchase C) barter D) offset E) buyback

C) barter

Which of the following documents issued to the exporter by the common carrier transporting the merchandise serves as a receipt, a contract, and a document of title? A) bill of exchange B) lease agreement C) letter of credit D) bill of lading E) memorandum of understanding

D) bill of lading

In the United States, the most comprehensive source of export information is the

Department of Commerce.

The agency of the U.S. government whose mission is to assist in the financing of U.S. exports of products and services to support U.S. employment and market competitiveness is called the

Ex-Im Bank.

SteelPro Corporation negotiated a deal with the Republic of Monaslu under which SteelPro would build three steel plants in the country, and as partial payment, the company would receive steel over a 10-year period. This is an example of

a buyback.

An agreement to purchase goods and services with a specified percentage of proceeds from an original sale in that country from any firm in the country is called

an offset.

The problem of lack of trust with regard to payment and delivery between the importer and the exporter is usually solved by using a(n)

bank.

ChipRight Company sold 10,000 computers to the government of Pabul. Instead of receiving cash, the company received crude oil as payment. This is an example of

barter.

The instrument normally used in international commerce to affect payment is called a

bill of exchange.

An alternative means of structuring an international sale when conventional means of payment are difficult, costly, or nonexistent is a ___ ___.

countertrade.

Export specialists who act as an export marketing department for client firms are called

export management companies.

The document that states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents is called the

letter of credit.

Japan's great trading houses with offices around the world that proactively seek export opportunities for their affiliated companies are called

sogo shosha.

The use of a specialized third-party trading house in a countertrade arrangement refers to

switch trading.

A(n) _____ is a draft that allows for a delay in payment.

time draft