Officially, the EU tariffs on Chinese and Vietnamese shoe imports are known as:

Officially, the EU tariffs on Chinese and Vietnamese shoe imports are known as:

A) Countervailing duties.
B) Antidumping duties.
C) Specific duties.
D) Ad valorem duties.
E) Temporary surcharges.


Answer: B) Antidumping duties.

The furniture industry has become one of the fastest-growing sectors of China's economy. Furniture imports are flooding into the United States from China. This can be attributed to:

The furniture industry has become one of the fastest-growing sectors of China's economy. Furniture imports are flooding into the United States from China. This can be attributed to:

A) the quality of furniture is better than that made in Europe.
B) American tastes in décor have changed.
C) China's low labor rates translate into reasonable prices for consumers.
D) China can survive tough competition.
E) replacement parts are readily available from China.


Answer: C) China's low labor rates translate into reasonable prices for consumers.

The organizational decision to purchase production inputs, components, or finished goods from domestic or foreign producers is known as the ________ decision.

The organizational decision to purchase production inputs, components, or finished goods from domestic or foreign producers is known as the ________ decision.

A) import/export
B) NTB
C) preferential
D) sourcing
E) security


Answer: D) sourcing

The chief executives of Swiss Swatch Group and Japanese Canon would like to:

The chief executives of Swiss Swatch Group and Japanese Canon would like to:

A) outsource all of the manufacturing units overseas in order to save money.
B) outsource a majority of the manufacturing functions overseas.
C) retain a majority, if not all, of the manufacturing in their home country.
D) establish "call centers" in developing countries in order to save labor costs.
E) outsource a full line of new products only.


Answer: C) retain a majority, if not all, of the manufacturing in their home country.

If the dollar, the yen, or the euro becomes seriously overvalued, a company with a production capacity in other locations can achieve competitive advantage by:

If the dollar, the yen, or the euro becomes seriously overvalued, a company with a production capacity in other locations can achieve competitive advantage by:

A) buying different currencies before major fluctuations take place.
B) conducting transactions in different currencies of the world.
C) shifting production among different sites.
D) cutting down production and waiting until the currency rate is reasonable.
E) reducing production and labor force simultaneously.


Answer: C) shifting production among different sites.

A number of explanations have been offered for the low level of U.S. exports relative to other countries. All of the following can be considered as reasons for low level of exports except:

A number of explanations have been offered for the low level of U.S. exports relative to other countries. All of the following can be considered as reasons for low level of exports except:

A) limited ambition by many American business owners.
B) lack of knowledge of market opportunities abroad.
C) perceived lack of necessary resources.
D) marketing to home-country users is easier than exporting.
E) a strong U.S. dollar translates into less affordable prices in export markets.


Answer: E) a strong U.S. dollar translates into less affordable prices in export markets.

In which of the following forms of export financing does a bank assume a financial obligation?

In which of the following forms of export financing does a bank assume a financial obligation?

A) with an L/C but not a documentary collection
B) with a documentary collection but not an L/C
C) neither an L/C nor a documentary collection requires a bank to assume financial obligation
D) with either an L/C or a collection letter
E) with both an L/C and a documentary collection


Answer: B) with a documentary collection but not an L/C

Which of the following incorrectly states the role of banks in import/export transactions involving a letter of credit (L/C)?

Which of the following incorrectly states the role of banks in import/export transactions involving a letter of credit (L/C)?

A) The exporter's bank is the advising and/or confirming bank.
B) The importer's bank is the advising and/or confirming bank.
C) The importer's bank is the advising, confirming, and issuing bank.
D) The exporter's bank is the advising, confirming, and issuing bank.
E) The importer's bank is neither advising nor confirming bank.


Answer: B) The importer's bank is the advising and/or confirming bank.

Which of the following arranges export financing payment methods in descending order starting with the most secure/reliable and ending with the least secure/reliable?

Which of the following arranges export financing payment methods in descending order starting with the most secure/reliable and ending with the least secure/reliable?

A) sales on open account→cash in advance→documentary credit (L/C)→documentary collection (draft)
B) documentary credit (L/C)→sales on open account→documentary collection (draft)→cash in advance
C) documentary collection (draft)→documentary credit (L/C)→cash in advance→sales on open account
D) cash in advance→documentary credit (L/C)→documentary collection (draft)→sales on open account
E) none of the above


Answer: D) cash in advance→documentary credit (L/C)→documentary collection (draft)→sales on open account

Which of the following financing methods would be used by an exporter that enjoys good relations with a buyer in a well-established market?

Which of the following financing methods would be used by an exporter that enjoys good relations with a buyer in a well-established market?

A) letter of credit
B) cash in advance
C) sales on open account
D) barter
E) arrival draft


Answer: C) sales on open account

Which of the following methods of financing would be used if the exporting and importing parties had a strong, long-standing relationship?

Which of the following methods of financing would be used if the exporting and importing parties had a strong, long-standing relationship?

A) documentary credit (letter of credit)
B) documentary collection
C) cash in advance
D) sales on open account
E) bank draft

Answer: D) sales on open account

In the post-September 11 business environment in the United States, imports have come under increased security. One of the initiatives taken in the interest of national security is:

In the post-September 11 business environment in the United States, imports have come under increased security. One of the initiatives taken in the interest of national security is:

A) NAFTA.
B) C-TPAT.
C) WTO.
D) NTB.
E) FSC.


Answer: B) C-TPAT.

Which of the following documents represents title to goods in an export transaction?

Which of the following documents represents title to goods in an export transaction?

A) bill of lading
B) invoice
C) packing list
D) certificate of origin
E) insurance certificates


Answer: A) bill of lading

An irrevocable letter of credit transfers the payment obligation for an export deal from the buyer to the buyer's:

An irrevocable letter of credit transfers the payment obligation for an export deal from the buyer to the buyer's:

A) in-house export organization.
B) bank.
C) freight forwarder.
D) credit union.
E) checking account.


Answer: B) bank.

Which set of documents generally represents the minimum documentation required to clear a shipment through customs?

Which set of documents generally represents the minimum documentation required to clear a shipment through customs?

A) packing list, commercial invoice
B) bill of exchange, commercial invoice
C) certificate of origin, bill of exchange
D) packing list, insurance certificate
E) letter of credit, commercial invoice


Answer: B) bill of exchange, commercial invoice

Which of the following completely eliminates the risk of nonpayment by an importer or a bank in an international transaction?

Which of the following completely eliminates the risk of nonpayment by an importer or a bank in an international transaction?

A) documentary credit (letter of credit)
B) documentary collection
C) cash in advance
D) sales on open account
E) draft


Answer: C) cash in advance

Which of the following correctly states the role of banks in import/export transactions involving a letter of credit (L/C)?

Which of the following correctly states the role of banks in import/export transactions involving a letter of credit (L/C)?

A) The importer's bank is the advising and/or confirming bank; the exporter's bank is the issuing bank.
B) The exporter's bank is the advising and/or confirming bank; the importer's bank is the issuing bank.
C) The exporter's bank is the advising, confirming, and issuing bank.
D) The importer's bank is the advising, confirming, and issuing bank.
E) none of the above


Answer: B) The exporter's bank is the advising and/or confirming bank; the importer's bank is the issuing bank.

______ is an independent marketing intermediary that acts as the export department for two or more manufacturers whose product lines do not compete with each other.

______ is an independent marketing intermediary that acts as the export department for two or more manufacturers whose product lines do not compete with each other.

A) Manufacturer's export agent
B) Export commission representative
C) Export merchant
D) Export management company
E) Cooperative exporter


Answer: D) Export management company

_____ are licensed specialists in traffic operations, customs clearance, and shipping tariffs and schedules. They can be considered as the travel agents for handling export goods.

_____ are licensed specialists in traffic operations, customs clearance, and shipping tariffs and schedules. They can be considered as the travel agents for handling export goods.

A) Foreign purchasing agents
B) Export brokers
C) Export merchants
D) Freight forwarders
E) Cooperative exporters


Answer: D) Freight forwarders

Direct representation, as opposed to representation by independent intermediaries for exporting in the market country, has several advantages which do not include:

Direct representation, as opposed to representation by independent intermediaries for exporting in the market country, has several advantages which do not include:

A) facilitates control and communications.
B) allows decisions concerning program development and resource allocation.
C) benefits when a product is not yet established in a market.
D) ensures marketer's interest and special efforts.
E) helps selling products directly to the consumer in the market country.


Answer: E) helps selling products directly to the consumer in the market country.