Question 1

A _______ draft is a document that requires the buyer to pay the seller the face amount as soon as the product arrives.

Accepted Answer

A sight draft is a document that requires the buyer to pay the seller the face amount as soon as the product arrives.

Question 2

A small business person advancing the product to an intermediary, who then tries to sell it to the final user is practicing

Accepted Answer

Consignment involves a small business person advancing the product to an intermediary, who then tries to sell it to the final user without payment being made until the product is sold. Payment is typically made based on a percentage of the final sale price. Payment in advance would involve the final user paying for the product before it is delivered, letter of credit and documentary collection are both forms of payment and do not involve an intermediary between the small business and final user.

Question 3

How many rounds has the General Agreement on Tariffs and Trade (GATT) gone through since its inception in 1947?

Accepted Answer

The answer of How many rounds has the General Agreement...

Question 4

Wilma has been asked by her boss to manage a new division within the company that is opening in Venezuela. Her boss indicated that she was chosen for the job because of her ability to connect with people from other cultures. Which attribute does Wilma possess?

Accepted Answer

Wilma's ability to connect with people from other cultures indicates that she possesses intercultural empathy, which is the capacity to understand and adapt to different cultural contexts. A, B, and D are not necessarily connected to the ability to connect with people from other cultures.

Question 5

The two major regional trade associations in South America are

Accepted Answer

MERCOSUR (Southern Common Market) and ANCOM (Andean Community) are the two major regional trade associations in South America. NAFTA (North American Free Trade Agreement) is a trade agreement between Canada, the United States, and Mexico, while EU (European Union) is a trade and political union between European countries. ASEAN (Association of Southeast Asian Nations) is a regional trade association in Southeast Asia. Therefore, the correct option is D.

Question 6

Requiring clients to pay for the product before the product is received is known as

Accepted Answer

Requiring clients to pay for the product before the product is received is known as payment in advance. This method provides the seller with full payment upfront, reducing the risk of non-payment or late payment from the buyer. It is the most secure method for the seller.

Question 7

Agreements that create economic and political ties between nations that are usually located within a close geographical area are known as

Accepted Answer

Regional trading groups, also known as regional economic integration, refer to agreements between countries that are located within a specific region to promote free trade, labor mobility, and investment. Examples of regional trading groups include the European Union (EU), North American Free Trade Agreement (NAFTA), and Association of Southeast Asian Nations (ASEAN). The other answer choices (B, C, and D) are either too narrow or do not accurately describe regional trading groups.

Question 8

The term _____________ means that a certain percentage of the product's value has to originate in a NAFTA country.

Accepted Answer

Regional value content, also known as regional value requirement or regional value threshold, is the percentage of a product's value that must originate in a NAFTA country in order to qualify for preferential trade benefits under NAFTA.

Question 9

An internationally recognized instrument issued by a bank on behalf of its client, the purchaser, which guarantees the bank will pay the seller is known as

Accepted Answer

A letter of credit is a secure payment method in which a bank guarantees payment to the seller. The bank issues the letter of credit on behalf of its client, the purchaser, and promises to pay the seller a specified amount if the seller meets certain pre-agreed conditions. This provides security for both the buyer and the seller in international trade transactions. Payment in advance and consignments are not forms of payment guarantees, while documentary collection is a payment method that involves the use of documents but does not offer the same level of security as a letter of credit.

Question 10

Which of the following is not a member state in the MERCOSUR trade organization?

Accepted Answer

MERCOSUR trade organization consists of Argentina, Brazil, Paraguay, and Uruguay as full members, and Bolivia as a member with pending ratification. Ecuador is not a member state in the MERCOSUR trade organization.

Question 11

A document that requires the buyer to pay the seller the face amount either when the product arrives or at a specified time in the future at which point title to the product then passes to the buyer is known as

Accepted Answer

This document describes a Documentary Collection, where the buyer is obligated to pay the seller either when the product arrives or on a specified future date, with the transfer of title occurring at that time. Payment in advance refers to the buyer paying before receiving the product, while a letter of credit involves a bank guaranteeing payment to the seller. Consignments involve the seller sending goods to a third party to be sold on their behalf.

Question 12

Gifts are most often exchanged in which of the following countries?

Accepted Answer

Gift-giving is an important part of Japanese culture and is done on various occasions such as weddings, births, and business meetings. There are specific customs and traditions that are followed while giving gifts in Japan, such as wrapping the gift beautifully, presenting it with both hands, and not opening the gift in front of the giver.

Question 13

Fads, styles, foods, and holidays are examples of which of the following?

Accepted Answer

Fads, styles, foods, and holidays are all examples of surface culture, which refers to the visible aspects of culture such as clothing, food, language, and celebrations. It can be easily observed and changed without affecting the core values and beliefs of a culture.

Question 14

When PepsiCo arranged for payment in vodka instead of payment in rubles, they were participating in

Accepted Answer

PepsiCo's arrangement to receive vodka instead of rubles is an example of countertrade, which is a form of international trade where goods or services are exchanged for other goods or services instead of using currency.

Question 15

An important attribute to possess to ensure an employee's success in a global environment is ________, which involves being able to deal with multiple moving parts and still being able to move forward in decision making.

Accepted Answer

The attribute described in the question is cognitive complexity, as it involves being able to process and manage multiple pieces of information while still making decisions and taking action. Diplomacy, global business knowledge, and a cosmopolitan outlook are all important in a global environment, but they do not directly relate to the ability to handle complexity in decision making.

Question 16

One of the primary goals of NAFTA is to eliminate tariffs and nontariff barriers between which of the following countries?

Accepted Answer

NAFTA was created to eliminate tariffs and nontariff barriers between the United States, Canada, and Mexico.

Question 17

In the United States, the average number of days needed to collect accounts receivable is

Accepted Answer

According to a report by Dun & Bradstreet, the average number of days needed to collect accounts receivable in the US is 42.

Question 18

How many days can you expect to wait for payment from customers from Greece, Albania, and Lithuania?

Accepted Answer

The answer of How many days can you expect to...

Question 19

The completion of a business deal without the use of money as a means of exchange is known as

Accepted Answer

Countertrade refers to the completion of a business deal without the use of money as a means of exchange. Instead, goods and services are exchanged between the parties involved. This type of trade is common in international business transactions, especially when dealing with countries that have restricted access to foreign currencies.

Question 20

In Japan, __________ are exchanged as a symbol of the depth and strength of a business relationship.

Accepted Answer

In Japan, gift-giving is an important part of business culture and is seen as a way to build and maintain relationships. Gifts are often exchanged at the beginning and end of meetings, as well as on special occasions such as the New Year or when someone retires. The value of the gift is not as important as the thought behind it, and it is considered polite to refuse a gift once or twice before accepting it.

Quiz 15: International Small Business