1. Only large companies have benefited significantly from the moneymaking opportunities of
exporting.
2. Firms that actively export often lose out on significant opportunities for growth and cost
reduction.
3. While small firms tend to be proactive about seeking opportunities for profitable
exporting, large firms are very reactive.
4. Reactive firms do not consider exporting until their domestic market is saturated.
5. Low growth prospects makes firms reactive about seeking opportunities for exporting.
6. Novice exporters easily realize the amount of management resources that have to be
dedicated to cultivate business in foreign countries.
7. Exporters often face voluminous paperwork, complex formalities, and many potential
delays and errors.
8. Unlike their German and Japanese competitors, many U.S. firms do not have adequate
information when they seek export opportunities.
9. German and Japanese firms are relatively more information disadvantaged than U.S.
firms.
10. For U.S. firms, the most comprehensive source of information on export opportunities is
the U.S. Department of Commerce.
11. Export Legal Assistance Network (ELAN), an organization within the U.S. Department of
Commerce, is dedicated to providing businesses with assistance for attacking foreign markets.
12. Commercial banks and major accounting firms are less willing to assist small firms in
starting export operations due to higher default risks.
13. Export management companies (EMCs) start exporting operations for a firm with the
understanding that the firm will take over operations after they are well established.
14. The advantage of export management companies is that they are experienced specialists
that can help the neophyte exporter identify opportunities and avoid common pitfalls.
15. The advantage of export management companies is that they are experienced specialists
that can help the neophyte exporter identify opportunities and avoid common pitfalls.
16. A firm that enters many markets at once runs the risk of spreading its limited
management resources too thin.
17. It often makes sense for a firm to enter a foreign market on a large scale to reduce the
costs of any subsequent failure.
18. Exporting is often not an end in itself, but merely a step on the road toward establishment
of foreign production.
19. Lack of trust in international trade is exacerbated by the distance between the two
parties in space, language, and culture.
20. Issued by a bank at the request of an importer, a bill of lading states that the bank will
pay a specified sum of money to a beneficiary, normally the exporter, on presentation of
particular, specified documents.
21. Banks charge exporters a fee for issuing a letter of credit.
22. A letter of credit may reduce an importer’s ability to borrow funds for other purposes.
23. A draft, an instrument normally used in international commerce to effect payment, is also
known as a letter of credit.
24. In international commerce, a person or business initiating a draft is known as the drafter
and the party to whom the draft is presented is known as the draftee.
25. In domestic trade transactions, a buyer can often obtain possession of merchandise
without signing a formal document acknowledging his or her obligation to pay.
26. In international commerce, a sight draft allows for a delay in payment.
27. In international commerce, time drafts are negotiable instruments.
28. A bill of lading can function as collateral against which funds are advanced to the
exporter by its local bank before final payment by the importer.
29. The Export-Import Bank provides financing aid to prospective U.S. exporters.
30. The mission of the Foreign Credit Insurance Association is to provide financing aid that
will facilitate exports, imports, and the exchange of commodities between the United States and
other countries.
31. Export credit insurance protects an exporter against the possibility of a foreign importer’s
default on payment when there is a lack of a letter of credit.
32. The principle of countertrade is to trade goods and services for money.
33. Barter is primarily used with trading partners who are not creditworthy or trustworthy.
34. Offset refers to the use of a specialized third-party trading house in a countertrade
arrangement.
35. Countertrade’s main attraction is that it can give a firm a way to finance an export deal
when other means are not available.
36. Which of the following is an advantage of exporting?
37. Exporting is nearly always a way to increase the revenue and profit base of a company
because: