Arizona State University - MGT 302

Chapter 16 Exporting, Importing, and Countertrade

True / False Questions

1)Proactive firms do not consider exporting until their domestic market is saturated.

True   False

2. Exporters often face voluminous paperwork and complex formalities.

True   False

3. The U.S. Department of Commerce organizes trade events that help potential exporters make foreign contacts and explore export opportunities.

True   False

4. Nearly every state in the U.S. maintains active trade commissions to promote exports.

True   False

5. Hiring an EMC will help a novice exporter identify opportunities and navigate the paperwork involved in exporting.

True   False

6. Lack of knowledge is one of the biggest impediments to a company becoming a successful exporter.

True   False

7. A letter of credit states that an exporter has availed credit from the bank to manufacture goods.

True   False

8. The bank promises to pay on behalf of the importer when a bank is used as a third party in international transactions.

True   False

9. A draft is simply an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.

True   False

10. A sight draft allows for a delay in payment.

True   False

11. When a time draft is drawn on and accepted by a business firm, it is called a trade acceptance.

True   False

12. Time drafts cannot be sold to investors at a discount from its face value.

True   False

13. The bill of lading does not serve as a document of title as such.

True   False

14. The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank.

True   False

15. U.S. organizations can get financing aid from the Export-Import Bank.

True   False

16. Ex-Im Bank has a direct lending operation under which it lends dollars to foreign borrowers.

True   False

17. Foreign Credit Insurance Association is a part of the U.S Department of Commerce and guides the activities of the Export-Import Bank.

True   False

18. Countertrade denotes a whole range of agreements that involve financial exchanges.

True   False

19. Barter is a reciprocal buying agreement that occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.

True   False

20. A counterpurchase gives exporters more flexibility than an offset.

True   False

21. The term switch trading refers to the use of a specialized third-party trading house in a countertrade arrangement.

True   False