Mechanisms for financing exports and imports have evolved over the centuries in response to a problem that can be particularly acute in international trade: ________________.
A) the letter of credit
B) the lack of trust
C) government regulations
D) undeveloped international political system
E) currency exchange rate differences

Question

Quizplus · Accepted Answer

The lack of trust between buyers and sellers in different countries is a significant problem in international trade, leading to the development of various financing mechanisms such as letters of credit, export credit insurance, and factoring. These mechanisms aim to minimize the risk for both parties and facilitate international trade.

Mechanisms for Financing Exports and Imports Have Evolved Over the Centuries