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Q:
Which of the following is a drawback of relying on an export management company (EMC)?
A. It does not provide references and has no antecedents.
B. The exporting company can fail to develop its own exporting capabilities.
C. It does not have expert specialists to help neophyte exporter identify opportunities.
D. It typically lacks information about local business regulations.
E. The exporting company cannot avoid the common pitfalls of exporting.
Q:
Which of the following is true of an export management company (EMC)?
A. It coordinates the Export Legal Assistance Network, a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.
B. It provides a potential exporter with a "best prospects" list.
C. It assembles a "comparison shopping service" for 14 countries.
D. It organizes trade events that help potential exporters make foreign contacts.
E. It specializes in serving firms in particular industries and in particular areas of the world.
Q:
Which of the following is a function of an export management company?
A. It starts exporting operations for a firm with the understanding that the firm will take over operations after they are well established.
B. It coordinates the Export Legal Assistance Network, a nationwide group of international trade attorneys.
C. It oversees volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.
D. It collects duties on exported products and sets interest rates for charging foreign investors.
E. It gives novice exporters the names and addresses of potential distributors in foreign markets along with businesses they are in.
Q:
A(n) _____ refers to an export specialist that acts as an export marketing department for client firms.
A. export management company
B. export-import firm
C. foreign direct investment management firm
D. strategy management company
E. association of export companies
Q:
The _____ refers to a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.
A. TradeNet Export Advisor
B. Export Trade Assistance Partnership
C. United States Trade Service
D. Export Legal Assistance Network
E. Ex-Im Network
Q:
Through its _____ program, the Small Business Administration oversees almost 11,500 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.
A. Export Legal Assistance Network
B. Service Corps of Retired Executives
C. International Trade Veteran's Group
D. Network of Foreign Trade Executives
E. Export Management Company
Q:
Which of the following organizations runs the Service Corps of Retired Executives (SCORE) program?
A. Foreign Credit Insurance Association
B. International Trade Administration
C. Small Business Administration
D. U.S. Department of Commerce
E. U.S. Commercial Service
Q:
The _____ is a government organization that helps potential exporters. It employs 76 district international trade officers and 10 regional international trade officers throughout the United States as well as a 10-person international trade staff in Washington, DC.
A. Federal Trade Commission
B. U.S. Commercial Service
C. International Trade Administration
D. Small Business Administration
E. sogo shosha
Q:
The U.S. Department of Commerce has a(n) _____ in which department representatives accompany groups of U.S. businesspeople abroad to meet with qualified agents, distributors, and customers.
A. matchmaker program
B. "best prospects" list
C. SCORE program
D. "comparison shopping service"
E. export-import program
Q:
Which of the following is a way in which the U.S. Department of Commerce helps potential exporters?
A. It oversees volunteers with international trade experience and directs them to provide one-on-one counseling to active and new-to-export businesses.
B. It assembles a "comparison shopping service" for 14 countries that are major markets for U.S. exports.
C. It coordinates a nationwide group of international trade attorneys who provide free initial consultations to small businesses on export-related matters.
D. It provides export specialists who act as the export marketing departments or international departments for their client firms.
E. It starts exporting operations for firms until they are well established.
Q:
The International Trade Administration provide the potential exporter with a(n) _____, which gives the names and addresses of potential distributors in foreign markets along with businesses they are in, the products they handle, and their contact person.
A. ELAN list
B. "best prospects" list
C. "comparison shopping service"
D. SCORE list
E. export management list
Q:
Which of the following is true of the International Trade Administration and the U.S. Commercial Service?
A. They are private organizations that assist U.S. exporters.
B. They are the great trading houses of the United States.
C. They are organizations within the U.S. Department of Commerce.
D. They are departments in the Small Business Administration.
E. They are global export management companies.
Q:
Which of the following institutions within the U.S. Department of Commerce is dedicated to providing businesses with intelligence and assistance for attacking foreign markets?
A. The International Trade Administration
B. The Small Business Administration
C. The Federal Trade Commission
D. The Bureau of Competition
E. The Bank of New York
Q:
The most comprehensive source of information on export opportunities for U.S. firms is the _____.
A. Small Business Administration
B. Department of Commerce
C. Federal Trade Commission
D. Bureau of Competition
E. Bank of New York
Q:
Which of the following is true of the export performance of the United States, Germany, and Japan?
A. Historically, the United States has made its living as a trading nation.
B. Germany has been a relatively self-contained continental economy in which international trade played a minor role.
C. Unlike Japan, U.S. firms have a strong information advantage when they seek export opportunities.
D. The United States has not yet evolved an institutional structure for promoting exports similar to that of Germany.
E. The Ministry of International Trade and Industry (MITI) in the United States is always on the lookout for export opportunities.
Q:
The sogo shosha of Japan:
A. proactively and continuously seek export opportunities for their affiliated companies.
B. exclusively serve the largest and most prestigious companies in Japan.
C. have offices concentrated in the business district of Tokyo.
D. have monopolized the export market in the country.
E. consider export only when there is excess production at home.
Q:
Japan's great trading houses are referred to as _____.
A. kaizen
B. sogo shosha
C. zaibatsu
D. guanxi
E. kanban
Q:
Due to the complexity and diversity of foreign markets, firms sometimes hesitate to seek export opportunities. These firms can best overcome ignorance by:
A. shortening production runs.
B. creating revenue.
C. outsourcing decisions.
D. collecting information.
E. lowering unit costs.
Q:
Which of the following is true of exporting?
A. It takes a very short time before all foreigners are comfortable enough to purchase in significant quantities.
B. Novice exporters tend to overestimate the time required to cultivate business in foreign countries.
C. Exporters often face voluminous paperwork, complex formalities, and many potential delays and errors.
D. Large firms are usually unfamiliar with foreign market opportunities.
E. Large firms do not consider exporting until their domestic market is saturated.
Q:
Which of the following is true of exporting?
A. Many foreign customers require face-to-face negotiations on their home turf.
B. Large firms tend to wait for the world to come to them, rather than going out into the world to seek opportunities.
C. Exporters have the advantage of reduced paperwork and fewer formalities.
D. Medium-sized and small firms are proactive about seeking opportunities for profitable exporting.
E. Firms that focus only on exporting often lose out on significant opportunities for growth and cost reduction.
Q:
Which of the following is a common pitfall that novice exporters come across?
A. Poor understanding of the opportunities in the domestic market
B. Low unit costs
C. Increased economies of scale
D. Problems securing financing
E. Familiar distribution systems
Q:
Which of the following is a reason why firms are not proactive about seeking export opportunities?
A. They are unfamiliar with foreign market opportunities.
B. domestic regulations limit their ability to export profitably.
C. they overestimate the time and expertise needed to cultivate business in foreign countries.
D. they do not find the foreign market challenging enough.
E. the export market is similar to the home market in terms of legal and business practices.
Q:
Many medium-sized and small firms are not proactive in seeking export opportunities because:
A. they are familiar with the foreign market and do not find it challenging enough.
B. the export market is similar to the home market in terms of legal and business practices.
C. they are intimidated by the complexities and mechanics of exporting to foreign countries.
D. domestic regulations limit their ability to export profitably.
E. they overestimate the time and expertise needed to cultivate business in foreign countries.
Q:
Which of the following is true of medium-sized and small firms?
A. They are proactive about seeking opportunities for profitable exporting.
B. They consider exporting only after their domestic market is saturated.
C. They are not intimidated by the complexities of foreign legal systems.
D. They have a high degree of familiarity with foreign market opportunities.
E. They explore foreign markets to see where the opportunities lie for leveraging their technology.
Q:
Large firms generally tend to be _____ about seeking opportunities for profitable exporting.
A. passive
B. risk averse
C. wary
D. proactive
E. neutral
Q:
Firms that do not export often:
A. face problems of currency conversion.
B. lose out on significant opportunities for cost reduction.
C. are able to reduce their unit costs.
D. are not intimidated by the business practices of foreign countries.
E. explore foreign markets to see where they can leverage their technology.
Q:
Exporting is nearly always a way to increase the revenue and profit base of a company because:
A. there is little competition in the international market.
B. foreign governments encourage imports from other countries.
C. international markets are less complex than their domestic counterparts.
D. the international market is much larger than the domestic market.
E. it does not involve wasting resources on paperwork.
Q:
Which of the following is an advantage of exporting?
A. It helps in easy currency conversion.
B. It provides large revenue and profit opportunities.
C. It reduces the administrative costs incurred by a company.
D. It helps companies increase their unit costs.
E. It reduces paperwork and complex formalities.
Q:
Countertrade's main attraction is that it can give a firm a way to finance an export deal when other means are not available.
Q:
Offset refers to the use of a specialized third-party trading house in a countertrade arrangement.
Q:
Barter is primarily used with trading partners who are not creditworthy or trustworthy.
Q:
The principle of countertrade is to trade goods and services for money.
Q:
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.
Q:
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.
Q:
The Export-Import Bank provides financing aid to prospective U.S. exporters.
Q:
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.
Q:
In international commerce, time drafts are negotiable instruments.
Q:
In international commerce, a sight draft allows for a delay in payment.
Q:
In domestic trade transactions, a buyer can often obtain possession of merchandise without signing a formal document acknowledging his or her obligation to pay.
Q:
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.
Q:
A draft, an instrument normally used in international commerce to effect payment, is also known as a letter of credit.
Q:
A letter of credit may reduce an importer's ability to borrow funds for other purposes.
Q:
Banks charge exporters a fee for issuing a letter of credit.
Q:
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.
Q:
Lack of trust in international trade is exacerbated by the distance between the two parties in space, language, and culture.
Q:
Exporting is often not an end in itself, but merely a step on the road toward establishment of foreign production.
Q:
It often makes sense for a firm to enter a foreign market on a large scale to reduce the costs of any subsequent failure.
Q:
A firm that enters many markets at once runs the risk of spreading its limited management resources too thin.
Q:
The advantage of export management companies is that they are experienced specialists that can help the neophyte exporter identify opportunities and avoid common pitfalls.
Q:
The advantage of export management companies is that they are experienced specialists that can help the neophyte exporter identify opportunities and avoid common pitfalls.
Q:
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.
Q:
Commercial banks and major accounting firms are less willing to assist small firms in starting export operations due to higher default risks.
Q:
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.
Q:
For U.S. firms, the most comprehensive source of information on export opportunities is the U.S. Department of Commerce.
Q:
German and Japanese firms are relatively more information disadvantaged than U.S. firms.
Q:
Unlike their German and Japanese competitors, many U.S. firms do not have adequate information when they seek export opportunities.
Q:
Exporters often face voluminous paperwork, complex formalities, and many potential delays and errors.
Q:
Novice exporters easily realize the amount of management resources that have to be dedicated to cultivate business in foreign countries.
Q:
Low growth prospects makes firms reactive about seeking opportunities for exporting.
Q:
Reactive firms do not consider exporting until their domestic market is saturated.
Q:
While small firms tend to be proactive about seeking opportunities for profitable exporting, large firms are very reactive.
Q:
Firms that actively export often lose out on significant opportunities for growth and cost reduction.
Q:
Only large companies have benefited significantly from the moneymaking opportunities of exporting.
Q:
What is countertrade? When can it be used?
Q:
Briefly describe the different forms of government-backed assistance that help potential U.S. exporters finance their export programs.
Q:
How does the Small Business Administration (SBA) help potential exporters?
Q:
What does the term sogo shosha mean? How do they help Japanese exporters and what role do they play in countertrade?
Q:
Why do many neophyte exporters have problems when trying to do business abroad for the first time? What are the common pitfalls experienced by such exporters?
Q:
Countertrade is most attractive to:
A. small exporters.
B. large multinational enterprises.
C. only U.S. firms.
D. any firm in democratic nations.
E. new companies.
Q:
Which of the following is a disadvantage of a countertrade agreement?
A. It does not allow firms to finance an export deal when other means are not available.
B. It is unattractive to multinational companies due to its time-consuming and expensive nature.
C. Firms prefer to be paid in hard currency.
D. It is useful only for small companies.
E. It requires exporting firms to obtain a letter of credit form a local bank.
Q:
Identify a drawback of a countertrade agreement.
A. It fails to give firms a way to finance an export deal.
B. It requires an in-house trading department to be maintained, which can be expensive and time-consuming.
C. It is detrimental to the economy of the importing country.
D. Developing nations may have trouble raising the foreign exchange necessary to pay for imports.
E. It is not an acceptable means of trading in most developing countries.
Q:
A drawback of countertrade is that:
A. it fails to enable firms to finance an export deal.
B. it is detrimental to the economy of the importing country.
C. developing nations have trouble raising the foreign exchange necessary to pay for imports.
D. it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals.
E. it may involve the exchange of poor-quality goods that cannot be disposed of profitably.
Q:
An advantage of _____ is that it helps in doing business in many developing nations that find it difficult to raise the foreign exchange necessary to pay for imports.
A. mergers
B. countertrade
C. free trade
D. arbitrage
E. franchising
Q:
Which of the following is an advantage of countertrade?
A. Firms can avoid setting up in-house trading departments.
B. It addresses the issue of lack of trust in international business.
C. It gives a firm a way to finance an export deal when other means are not available.
D. Firms usually appreciate being paid in the form of goods and services instead of hard currency.
E. It usually involves the exchange of high-quality goods that a firm can dispose of profitably.
Q:
TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period. This is an example of _____.
A. switch trading
B. a buyback
C. a counterpurchase
D. an offset
E. barter
Q:
A(n) _____ occurs when a firm builds a plant in a country and agrees to take a certain percentage of the plant's output as partial payment for the contract.
A. counterpurchase
B. offset
C. switch trading
D. buyback
E. barter
Q:
A firm concludes a counterpurchase agreement with a foreign country for which it receives some counterpurchase credits for purchasing its goods. The firm does not want any foreign goods, however, so it sells the credits to a third-party trading house at a discount. The trading house finds a firm that can use the credits and sells them at a profit. This is an example of _____.
A. barter
B. switch trading
C. an offset
D. a buyback
E. compensation
Q:
In a joint venture, a firm benefits from a local partner's knowledge of the host country's competitive conditions, culture, language, political systems, and business systems.
Q:
Franchising, a mode of entry into a foreign market, helps firms exert greater quality control over franchises in foreign locations.
Q:
In terms of the various modes of entry into a foreign market, franchising is employed primarily by service firms, whereas licensing is pursued primarily by manufacturing firms.