Question 1

The probability of exporting successfully can be increased dramatically by taking eight strategic steps.What are these steps?

Accepted Answer

The answer of The probability of exporting successfully can be...

Question 2

The way to overcome ignorance in exporting is to collect information.

Accepted Answer

Collecting information about the foreign markets, regulations, cultural norms, and potential customers can help overcome ignorance and enable successful exporting.

Question 3

Most exporters understand the amount of management resources that must be dedicated to exporting.

Accepted Answer

Many exporters, especially those new to international trade, often underestimate the amount of management resources, time, and effort required to successfully navigate the complexities of exporting. This includes understanding market regulations, cultural differences, logistics, and foreign market demands.

Question 4

When it comes to bank's service charge for providing a L/C, the larger the transaction, the higher the percentage.

Accepted Answer

The service charge for providing a Letter of Credit (L/C) by a bank is typically a fixed percentage or a flat fee and does not necessarily increase as a percentage with the size of the transaction. Larger transactions might negotiate lower percentage fees due to the volume of business.

Question 5

Germany is one of the world's most successful exporting nations.

Accepted Answer

Germany is indeed one of the world's most successful exporting nations, with exports accounting for almost half of its GDP. Its main exports include machinery, vehicles, chemicals, and electronic equipment.

Question 6

Barter is primarily used with trading partners who are not creditworthy or trustworthy.

Accepted Answer

The answer of Barter is primarily used with trading partners...

Question 7

Lack of trust in international trade is exacerbated by the distance between two parties in space, language, and culture.

Accepted Answer

Lack of trust is a common challenge in international trade and it can be further complicated by factors such as physical distance, language barriers, and cultural differences. These factors can create misunderstandings or make it difficult to establish effective communication and build relationships between trading partners, leading to a lack of trust in the trade processes.

Question 8

A draft is the instrument normally used in international commerce to effect payment.

Accepted Answer

A draft, also known as a bill of exchange, is commonly used in international commerce as a payment instrument. It allows for the transfer of funds between parties, and serves as a legal document guaranteeing payment.

Question 9

Given the financial and other risks, today, governments at all levels in Canada are not willing to assist small firms in starting export operations.

Accepted Answer

While there are certainly risks associated with exporting for small firms, governments in Canada do offer support and assistance for those looking to expand their operations overseas. This includes programs, grants, and other resources to help small businesses navigate the process and mitigate potential risks.

Question 10

How can Canadian firms increase their awareness of export opportunities? What agencies can be used? What do they provide?

Accepted Answer

The answer of How can Canadian firms increase their awareness...

Question 11

A sight draft allows for a delay in payment.

Accepted Answer

Unlike a time draft, a sight draft is payable on presentation to the drawee.

Question 12

Why do many neophyte exporters have problems when first trying to do business abroad? What are the common pitfalls of neophyte exporters?

Accepted Answer

The answer of Why do many neophyte exporters have problems...

Question 13

Describe the mechanisms for financing export and imports.Do you believe that the complexity of export financing deters small firms from becoming involved in exporting? Explain your answer.

Accepted Answer

The answer of Describe the mechanisms for financing export and...

Question 14

For novice exporters, it is recommended that they hire an EMC to help identify opportunities and navigate through the web of paperwork and regulations.

Accepted Answer

EMCs (Export Management Companies) can provide valuable assistance for first-time exporters by offering market research, identifying potential buyers, arranging shipping and handling logistics, and providing guidance on legal regulations and paperwork requirements.

Question 15

From an exporter's perspective, an offset agreement is more attractive than a straight counter-purchase agreement because it gives the exporter greater flexibility to choose the goods that it wishes to purchase.

Accepted Answer

Offset agreement allows the exporter to choose which goods to purchase in exchange for the exported goods or services while counter-purchase agreement requires the exporter to purchase a specific amount of goods from the importing country. Therefore, offset agreement provides greater flexibility to exporters.

Question 16

Countertrade is an alternative means of structuring an international sale.

Accepted Answer

Countertrade involves exchanging goods or services instead of using traditional currency payments. It can be used to overcome barriers such as lack of currency convertibility or foreign exchange restrictions. This makes it an alternative means of structuring an international sale.

Question 17

Switch trading involves the direct exchange of goods and/or services between two parties without a cash transaction.

Accepted Answer

The answer of Switch trading involves the direct exchange of...

Question 18

The bill of lading can function as collateral against which funds may be advanced to the exporter by its local bank before final payments by the importer.

Accepted Answer

This is true. The bill of lading serves as a document of title to the goods and can be used as security for a loan from the exporter's bank. This allows the exporter to receive funds before the importer makes final payments.

Question 19

The Business Development Bank of Canada focuses on Canadian exporting businesses in the technology sector and provides financial assistance mainly for export specific purposes as a way to facilitate the exchange of commodities between Canada and other countries.

Accepted Answer

The statement accurately describes the focus and role of the Business Development Bank of Canada (BDC) in supporting Canadian exporting businesses in the technology sector through financial assistance specifically for export-related activities.

Question 20

Time drafts are negotiable instruments.

Accepted Answer

Time drafts are negotiable instruments, meaning that they can be transferred between parties and used as a form of payment.

Quiz 13: Exporting, Importing, and Countertrade