Chat with AIExam 16: Exporting, importing, and Countertrade
What is the main attraction of countertrade?
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VerifiedThe main attraction of countertrade is that it can give a firm a way to finance an export deal when other means are not available.Many developing nations have problems raising the foreign exchange necessary to pay for imports.Countertrade may be the only option available when doing business in these countries.Even when other options exist,many countries prefer countertrade to cash deals.
Explain countertrade and its purpose.
(83) VerifiedWhen conventional means of payment are difficult,costly,or nonexistent,firms may turn to countertrade as an alternative means of structuring an international sale.Countertrade denotes a whole range of barter-like agreements; its principle is to trade goods and services for other goods and services when they cannot be traded for money.Countertrade can be used when a government restricts the convertibility of its currency to preserve its foreign exchange reserves so they can be used to service international debt commitments and purchase crucial imports.
A _____ is issued to the exporter by the common carrier transporting the merchandise and serves as a receipt,a contract,and a document of title.
(67) VerifiedA
A draft is simply an order written by an exporter instructing an importer to pay a specified amount of money at a specified time.
(93) The bill of lading is a product guarantee issued by the exporter to the importer.
(74) Firms commonly employ a reputable bank as third party in international transactions.
(73) _____ is the direct exchange of goods and/or services between two parties without a cash transaction and is the simplest arrangement.
(87) The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank.
(80) A _____ states that the bank will pay a specified sum of money to a beneficiary,normally the exporter,on presentation of particular,specified documents.
(77) Counterpurchase occurs when a firm agrees to purchase a certain amount of materials back from a country to which a sale is made.
(77) EMCs are governmental agencies that help the U.S.Department of Commerce to promote export in the United States.
(76) _____ is viewed as the most restrictive countertrade arrangement and is primarily used for one-time-only deals in transactions with trading partners who are not creditworthy or trustworthy.
(79) Through its _____ program,the SBA oversees about 850 volunteers with international trade experience to provide one-on-one counseling to active and new-to-export businesses.
(84) The Foreign Credit Insurance Association does not provide coverage against political risks faced by exporters.
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