Question 1

Why are financial risks a key concern of SMEs considering international trade?

Accepted Answer

The answer of Why are financial risks a key concern...

Question 2

An arbitrageur is an exporter that seeks to conduct countertrade in emerging markets.

Accepted Answer

An arbitrageur is not specifically an exporter, but rather an individual or entity that takes advantage of price differences between different markets or financial instruments to make a profit. Countertrade is a separate concept that involves the exchange of goods or services instead of money in international trade deals, and is not limited to emerging markets.

Question 3

A driving factor for the growth in imports is the impact of ________.

Accepted Answer

Labor specialization increases efficiency and productivity, leading to a higher demand for imported goods that are not produced domestically.

Question 4

According to the text, technological advances such as e-mail and VoIP have increased the appeal of international trade because it is now easy and inexpensive to manage customer needs and communicate with customers frequently.

Accepted Answer

The answer of According to the text, technological advances such...

Question 5

Exporters employ an export management company as part of an indirect exporting strategy.

Accepted Answer

Export management companies (EMCs) are commonly used as part of an indirect exporting strategy by companies who may not have the expertise or resources to manage international sales on their own. EMCs act as intermediaries between the exporter and potential foreign buyers, handling tasks such as market research, finding distributors or agents, and coordinating shipping and logistics. By outsourcing these functions to an EMC, companies can benefit from their expertise and established networks to expand their global reach.

Question 6

Companies new to exporting most frequently suffer over-commitment by top management in taking on the initial difficulties and financial requirements of exporting.

Accepted Answer

Companies new to exporting most frequently suffer from under-commitment by top management in taking on the initial difficulties and financial requirements of exporting, not over-commitment.

Question 7

In the U.S., international trade is hampered by homeland security issues and delays.

Accepted Answer

Homeland security measures such as increased inspections and paperwork requirements can cause delays in international trade, affecting the efficiency and competitiveness of importers and exporters in the U.S.

Question 8

What are export management companies, and how do they help potential exporters?

Accepted Answer

The answer of What are export management companies, and how...

Question 9

The primary responsibilities of the ________ are the assessment and collection of all duties, taxes, and fees on imported merchandise, the enforcement of customs and related laws, and the administration of certain navigation laws and treaties.

Accepted Answer

The U.S. Customs and Border Protection is responsible for the assessment and collection of duties, taxes, and fees on imported merchandise, as well as the enforcement of customs and related laws. The other choices, the U.S. Secret Service, Internal Revenue Service, and Food and Drug Administration, do not have primary responsibilities in these areas.

Question 10

Which of the following is NOT a primary duty of the U.S.Customs and Border Protection?

Accepted Answer

While the U.S. Customs and Border Protection does assess duties, taxes, and fees on imported merchandise, protects the U.S. from threatening imports, and polices smuggling operations, it is not solely responsible for collecting import and export tariffs. The collection of tariffs is handled by the Department of the Treasury.

Question 11

According to surveys, the most common concern regarding international trade is a shortage of working capital to finance exporting activities.

Accepted Answer

This is a commonly cited concern among small and medium-sized enterprises (SMEs) looking to engage in international trade. Access to financing and working capital can be a major barrier to entry for businesses seeking to expand globally.

Question 12

You are the manager of an SME in the United States, and your firm wants to begin exporting.Since you have never been involved with exporting, there are many compelling reasons that encourage contacting the ________ to obtain expert counseling on exporting.

Accepted Answer

The U.S. Commerce Department's International Trade Administration provides expert counseling and assistance to SMEs that want to begin exporting. They help firms navigate the export process and connect them with potential buyers in international markets. The Small Business Administration also provides some support for exporting, but the U.S. Commerce Department is specifically focused on this area. The U.S. Treasury Department and Federal Credit Insurance Association are not directly involved in exporting assistance.

Question 13

A major pitfall of exporting is misclassifying products in terms of the destination country's tariff schedule, thereby incurring a higher tax or slower delivery.

Accepted Answer

Misclassifying products in terms of destination country's tariff schedule can result in higher tax or slower delivery in the exporting process.

Question 14

What is the most likely reason that firms avoid aggressively seeking export opportunities?

Accepted Answer

Firms may be reluctant to adjust their established business practices to meet the cultural, regulatory, and logistical challenges of exporting. This can make firms hesitant to aggressively seek out export opportunities.

Question 15

In what is known as direct exporting, the exporter sells goods directly to or through an independent domestic intermediary in the exporter's home country that then exports the products to foreign markets.

Accepted Answer

In direct exporting, the exporter sells goods directly to foreign markets without involving any domestic intermediary. The statement describes indirect exporting, where the exporter sells goods through an independent domestic intermediary that then exports the products to foreign markets.

Question 16

Why is countertrade considered inefficient?

Accepted Answer

The answer of Why is countertrade considered inefficient?...

Question 17

One advantage of importing is that an importer can diversify its operating risks by developing alternative suppliers.

Accepted Answer

By importing from different suppliers, an importer can reduce its dependency on any one supplier and decrease the risk of disruptions in the supply chain caused by factors such as political instability or natural disasters. This helps to diversify the operating risks of the importing business.

Question 18

Which of the following is NOT one of the three main types of importers?

Accepted Answer

Importers looking for suppliers abroad to concentrate their operating risks is not one of the three main types of importers. Typically, importers seek to diversify and mitigate risks rather than concentrate them. The other options (B, C, D) represent common motivations for importing, such as profit, quality, and supply chain optimization.

Question 19

A customs broker or other import consultant can help an importer minimize import duties by ________.

Accepted Answer

Valuing products in a strategic way can help an importer qualify for more favorable duty treatment, such as through the use of preferential trade agreements or tariff classification. Bypassing duty rebates through drawback provisions, incurring duties through non-bonded warehouses and foreign trade zones, and improperly marking country of origin can all result in penalties and increased duties.

Question 20

All of the following are common problems associated with exporting and importing EXCEPT ________.

Accepted Answer

The answer of All of the following are common problems...

Quiz 14: Export and Import