IB Chapter 14 Quiz

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

A)Carry trade
B)Spot trade
C)Countertrade
D)Forward exchange
E)Currency swap

C)Countertrade
The problem of lack of trust with regard to payment and delivery between the importer and the exporter is usually solved by using a _____ to act as an intermediary.

A)bank
B)export management company
C)government
D)trade bureau
E)trading house

A)bank
A _____ is the instrument normally used in international commerce to effect payment.

A)contract agreement
B)bill of exchange
C)letter of credit
D)memorandum of understanding
E)lease agreement

B)bill of exchange
From an exporter’s perspective, a straight counterpurchase agreement is more attractive than an offset counterpurchase agreement because it gives the exporter greater flexibility to choose the goods that it wishes to purchase.

True/False

False
In the US, the most comprehensive source of export information is the _____.

A)Economic
Adjustment Office
B)Department of the Treasury
C)Domestic Policy Council
D)Department of Commerce
E)Bureau of Economic Analysis

D)Department of Commerce
Issued by a bank at the request of an importer, the _____ states that the bank will pay a specified sum of money to a beneficiary, normally the exporter, on presentation of particular, specified documents.

A)lease agreement
B)contract agreement
C)bill of exchange
D)memorandum of understanding
E)letter of credit

E)letter of credit
Japan’s great trading houses with offices around the world that proactively seek export opportunities for their affiliated companies are called _____.

A)sogo shosha
B)chaebol
C)ganqing
D)kaizen
E)guanxi

A)sogo shosha
_____ are export specialists who act as an export marketing department for client firms.

A)Export management companies
B)Export import companies
C)Wholesale merchandisers
D)Trade information bureaus
E)Overseas trade organizations

A)Export management companies
Reactive firms do not even consider exporting until their domestic market is saturated and the emergence of excess productive capacity at home forces them to look for growth opportunities in foreign markets.

True/False

True
The _____ is an independent agency of the U.S. government entrusted with the mission to provide financing aid that will facilitate exports, imports, and the exchange of commodities between the United States and other countries.

A)Department of Commerce
B)The Federal Reserve
C)Ex-Im Bank
D)Department of the Treasury
E)Bureau of Economic Analysis

C)Ex-Im Bank