Deck 8: Importing, Exporting, and Sourcing

Question 1

Representatives of the apparel, footwear, and textile industries in may countries are deeply concerned about the impact increased trade with China will have on these sectors.

Answer 1

True

Question 2

The Harmonized Tariff System (HTS)is currently the dominant system for determining tariffs.

Answer 2

True

Question 3

In an effort to facilitate exports, countries are designating certain areas as "free trade zones" (FTZ)or "special economic zones" (SEZ).

Answer 3

True

Question 4

The terms "export selling" and "export marketing" are interchangeable.

Question 5

The four tigers-Singapore, South Korea, Taiwan and Hong Kong-learned from the Japanese experience and built strong export-based economies of their own.

Question 6

"Export selling" involves tailoring various elements of the marketing mix to global market requirements.

Question 7

It was found by research that even the most experienced exporters express lack of confidence in their knowledge about shipping arrangements, payment procedures, and regulations.

Question 8

Milan is widely regarded as the design capitol of the world.The year 2011 marked the 50th anniversary of the "Milan Furniture Fair," the world's largest furniture and home furnishings trade fair.

Question 9

The Common Agricultural Policy (CAP)determines the level of subsidies granted to farmers in Latin America.

Question 10

Export marketing requires an understanding of the target market environment.

Question 11

According to the recent import regulations in the United States, action figures that represent non-human creatures such as monsters or robots are categorized as toys and qualified for lower duties than human figures that are classified as dolls.

Question 12

Under the HTS, only U.S.exports valued at more than $2,500 are counted in export statistics.

Question 13

Tariffs can be thought of as the "three R's" of global business: rules, rigor, and regulations of individual countries.

Question 14

A nontariff barrier (NTB)is a hidden trade barrier which is a deterrent or obstacle to the sale of products in a foreign market.

Question 15

In response to the ongoing economic crisis, U.S.President Barack Obama created a National Export initiative and established the President's Export Council.

Question 16

After the research effort has zeroed in on potential markets, there is no substitute for a personal visit to size up the market firsthand and begin the development of an actual export marketing program.

Question 17

Research has shown that exporting is essentially a developmental process that can be divided into several stages.

Question 18

The WTO recently ruled that America's foreign sales corporation (FSC)law was acceptable to signatory countries.

Question 19

The Harmonized Tariff System (HTS)has eliminated virtually all problems associated with assigning tariff classifications to new products.

Question 20

Potential export problems include packaging, government red tape, warehousing, advertising, and trade restrictions.

Question 21

In 2005, the U.S.Commerce Department determined that wooden bedroom furniture from China was being dumped, that is, sold less than fair value.Tariffs ranging from 1% to more than 200% was imposed.

Question 22

In an export/import transaction requiring a letter of credit (L/C), the exporter's (seller's)bank can be known as the "advising" bank, the "confirming" bank, or both.

Question 23

When a letter of credit is used in an import/export transaction, the payment obligation lies with the importer's bank rather than the importer itself.

Question 24

Duty drawback refers to refunds of duties paid on imports that are processed or incorporated into other goods and then reexported.

Question 25

When Honda's U.S.manufacturing subsidiaries purchase parts from Japan, customs authorities in the United States have the right to scrutinize the transfer price to make sure it is a fair reflection of market value.

Question 26

CVDs are duties imposed on imported videodiscs.

Question 27

According to a speech given by President Barack Obama, in many ways we can measure America's bottom line by looking at Caterpillar's bottom line.

Question 28

Outsourcing means shifting undesirable jobs or work assignments to another company to cut costs.When the outsourced work moves to another country, the terms "global outsourcing" or "offshoring" are used.

Question 29

An ad valorem duty is expressed as a percentage of the value of goods.

Question 30

Foreign purchasing agents are also referred to as jobbers.

Question 31

The Buy American Act of 1933, which stipulates that U.S.federal agencies must buy articles produced in the United States unless domestically produced goods are not available, is an example of discriminatory procurement policies.

Question 32

"Piggyback exporter," "cooperative exporter," and "export vendor" are all terms used to describe an export broker.

Question 33

The cooperative exporters are sometimes referred to as "mother hen."

Question 34

In deciding where to source a product or locate a manufacturing activity, a manager must take into account foreign exchange rate trends in various parts of the world.

Question 35

The Customs Trade Partnership Against Terrorism (C-TPAT)recognizes that U.S.Customs and Border Protection (CBP)is responsible for screening import cargo transactions.

Question 36

Goods that are sold on open account are paid for before delivery.

Question 37

One of the keys to the success of The Swatch Group's Swatch watch brand has been manufacturing in low-wage Asian countries.

Question 38

Comedies such as Outsourced that traffic in parodies and satires of cultural stereotypes are popular in India.

Question 39

The Fly American Act is an example of a nontariff barrier.

Question 40

Dell Computer recently rerouted some of its call center jobs back to the United States after complaints from key business customers that Indian tech support workers were offering scripted responses and having difficulty answering complex problems.

Question 41

Which of the following is sometimes referred to as a "buyer for export" or an "export commission house" and operates on behalf of a buyer from a foreign country?

A)foreign purchasing agent
B)export broker
C)export merchant
D)export management company
E)freight forwarder

Question 42

Which of the following receives a fee for bringing together an exporter and a buyer in another country?

A)foreign purchasing agent
B)export broker
C)export merchant
D)export management company
E)freight forwarder

Question 43

The Ministry of International Trade and Industry (MITI)has helped devise export strategies for companies in:

A)Singapore.
B)South Korea.
C)Taiwan.
D)Hong Kong.
E)Japan.

Question 44

Export marketing does not require:

A)an understanding of the target market environment.
B)the use of marketing research.
C)identification of market potential.
D)a selling approach.
E)any decisions concerning product design.

Question 45

Sweden applies a system to certain categories of imported agricultural products which is referred to as:

A)temporary surcharges.
B)ad valorem duty.
C)variable import levies.
D)specific duty.
E)countervailing duty.

Question 46

________ is a/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

Question 47

The export and import process can entail red tape and bureaucratic delays.In an effort to facilitate exports, countries are designating certain areas as:

A)import control zones.
B)special tariff zones.
C)global business zones.
D)free trade zones.
E)duty free zones.

Question 48

According to percent market share of top ten apparel exporting countries to the United States, which country ranked as number one in 2010?

A)Taiwan
B)China
C)Mexico
D)India
E)Honduras

Question 49

Which of the following types of duties would be imposed on a company whose home-country government provided export subsidies?

A)ad valorem duty
B)countervailing duty
C)antidumping duty
D)specific duty
E)customs duty

Question 50

In an effort to attract assembly operations, Brazil allows certain product components to be imported at reduced tariff rates.This is an example of:

A)offsets.
B)preferential tariffs.
C)the effect of the Customs Valuation Code.
D)an EMC.
E)discriminatory procurement.

Question 51

A duty that represents a certain percentage of the value of a particular product is a(n):

A)specific duty.
B)ad valorem duty.
C)BTN duty.
D)"schedule B" duty.
E)antidumping duty.

Question 52

Which of the following is described as the three R's of global business: rules, rate schedules, and regulations?

A)quotas
B)tariffs
C)NTBs
D)NTR
E)duties

Question 53

________ 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

Question 54

The possible arrangements of the responsibilities for handling exports include all of the following except:

A)as a part-time activity performed by domestic employees.
B)through an export partner affiliated with the domestic marketing structure.
C)through an export department within an international division.
D)through an export department that is independent of the domestic marketing structure.
E)through an export department of an embassy in foreign country.

Question 55

Which of the following establishes classification numbers that must be used by importers and exporters?

A)NTR
B)CVD
C)FSC
D)NTB
E)HTS

Question 56

Which of the following is not true about a personal visit to size up the market firsthand and begin the development of an actual export-marketing program?

A)Confirm assumptions regarding market potential.
B)Contradict assumptions regarding market potential.
C)Gather additional data to help make decisions.
D)Develop a marketing plan in cooperation with local agents.
E)To have face-to-face meeting and avoid going to trade shows.

Question 57

Which of the following was a major U.S.tax incentive for exporters that the WTO recently ruled was an illegal subsidy?

A)NTR
B)CVD
C)FSC
D)NTB
E)HTS

Question 58

The sale of merchandise in export markets at unfair prices is known as ________.

A)dumping.
B)countervailing.
C)tariff.
D)ad valorem.
E)transaction.

Question 59

Which of the following refers to a system of farm subsidies in Europe?

A)CVD
B)FSC
C)CAP
D)HTS
E)NTR

Question 60

Restrictive administrative and technical regulations can create barriers to trade which may take all of the following forms except:

A)antidumping regulations.
B)product size regulations.
C)safety and health regulations.
D)common agricultural policies.
E)safety and pollution regulations.

Question 61

Which of the following offers a company the best assurance of being paid for exported goods?

A)a letter of credit
B)a "piggyback" arrangement
C)a swap
D)an in-house export organization
E)a certified check

Question 62

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.

Question 63

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.

Question 64

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.

Question 65

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.

Question 66

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

Question 67

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

Question 68

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

Question 69

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

Question 70

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.

Question 71

The international standard by which letters of credit (L/Cs)are interpreted is known as the ________ 500.

A)UCP
B)NTR
C)FSC
D)NTB
E)HTS

Question 72

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.

Question 73

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

Question 74

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

Question 75

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

Question 76

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

Question 77

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

Question 78

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

Question 79

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.

Question 80

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