Which of the following statements is true of export financing?

Question

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Governments may encourage exports by providing loan guarantees to exporters, which helps to mitigate the risk associated with exporting. This can make it easier for companies to secure financing from private lenders, and ultimately support their exporting efforts. Option A is incorrect because small businesses may not have the financial stability to support their exporting activities, and may require financing from various sources. Option B is incorrect because the Ex-Im Bank primarily supports the exporting activities of US companies. Option C is incorrect because governments usually offer loans to exporters at below-market interest rates to make them more attractive to borrowers.

Which of the Following Statements Is True of Export Financing