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International Business, 12e (Hill)
1) Proactive firms do not consider exporting until their domestic market is saturated.
2) Ignorance of the potential opportunities is a huge barrier to exporting.
3) Exporters often face voluminous paperwork and complex formalities.
4) Hiring an export management company (EMC) will help a novice exporter identify
opportunities and navigate the paperwork involved in exporting.
5) Lack of knowledge is one of the biggest impediments to a company becoming a successful
exporter.
6) The Japanese sogo shosha have offices all over Japan, and companies wishing to trade with
Japan must go through them.
7) The most comprehensive source of information for U.S. firms on exporting opportunities is the
U.S. Department of Commerce.
8) The Small Business Administration organizes trade events that help potential exporters make
foreign contacts and explore export opportunities, held in major cities worldwide.
9) An export packer can advise companies who are unfamiliar with exporting on appropriate
design and materials for the packaging of their items.
10) Nearly every state in the United States maintains active trade commissions to promote exports.
11) A letter of credit states that an exporter has availed credit from the bank to manufacture goods.
12) The bank promises to pay on behalf of the importer when a bank is used as a third party in
international transactions.
13) A draft is simply an order written by an exporter instructing an importer to pay a specified
amount of money at a specified time.
14) A sight draft allows for a delay in payment.
15) When a time draft is drawn on and accepted by a business firm, it is called a trade acceptance.
16) Time drafts cannot be sold to investors at a discount from face value.
17) The bill of lading does not serve as a document of title as such.
18) The bill of lading can function as collateral against which funds may be advanced to the
exporter by its local bank.
19) U.S. organizations can get financing aid from the Export-Import Bank.
20) Ex-Im Bank has a direct lending operation under which it lends dollars to foreign borrowers.
21) The Foreign Credit Insurance Association is part of the U.S Department of Commerce and
guides the activities of the Export-Import Bank.
22) Countertrade denotes a whole range of barter-like agreements that involve trading goods and
services when they cannot be traded for money.
23) 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.
24) A counterpurchase gives exporters more flexibility than an offset.
25) The term switch trading refers to the use of a specialized third-party trading house in a
countertrade arrangement.
26) Countertrade is least attractive to large, diverse multinational enterprises.
27) What is true of exporting?
A) A common pitfall of exporting is a poor understanding of competitive conditions in the foreign
market.
B) Securing financing is rarely a problem for exporters.
C) A common pitfall of exporting is trying too hard to customize a product offering rather than
"sticking with what you know."
D) Most exporters have a very good understanding of the competitive conditions in the foreign
market.
28) Which of the following statements is true of exporting?
A) It increases the trade deficit that nations have.
B) Exporting leads to diseconomies of scope.
C) It helps a firm achieve economies of scale.
D) Exporting is not beneficial to a country's economy.
29) The great promise of exporting is that
A) large revenue opportunities are often found in foreign markets.
B) it provides more opportunities to smaller firms than larger firms.
C) international trade is protected against exchange risks.
D) it reduces the need for insuring businesses against political risks.
