QUESTION TruWorth Petroleum negotiated a deal with a foreign country in which TruWorth would build several ammonia plants in the foreign country and receive ammonia as partial payment over a 20-year period. This is an example of: A. switch trading. B. a buyback. C. a counterpurchase. D. an offset. E. barter. ANSWER B
Date: September 3rd, 2020
QUESTION A drawback of countertrade is that: A. it fails to enable firms to finance an export deal. B. it is detrimental to the economy of the importing country. C. developing nations have trouble raising the foreign exchange necessary to pay for imports. D. it does not allow firms to invest in an in-house trading […]
Date: September 3rd, 2020
QUESTION A firm builds a plant in a country and agrees to take a certain percentage of the plant’s output as partial payment for the contract. This type of countertrade is called a(n): A. counterpurchase. B. offset. C. switch trade. D. buyback. E. barter. ANSWER D
Date: September 3rd, 2020
QUESTION Countertrade is most attractive to: A. small exporters. B. large multinational enterprises. C. only U.S. firms. D. any firm in democratic nations. E. new companies. ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following is a drawback of a countertrade agreement? A. It fails to give firms a way to finance an export deal. B. It requires an in-house trading department to be maintained, which can be expensive and time-consuming. C. It is detrimental to the economy of the importing country. D. Developing nations […]
Date: September 3rd, 2020
QUESTION In recent years, the trend among U.S. firms is to outsource the “production” of certain service activities to developing nations where labor costs are lower. Indicate whether the statement is true or false. ANSWER TRUE In recent years, the trend among U.S. firms is to outsource the “production” of certain service activities to […]
Date: September 3rd, 2020
QUESTION The production and supply chain management of an international firm are independent of each other. Indicate whether the statement is true or false. ANSWER FALSE Production and supply chain management are closely linked because a firm’s ability to perform its production activities efficiently depends on a timely supply of high-quality material and information […]
Date: September 3rd, 2020
QUESTION The objectives of reducing costs and increasing quality in a firm are independent of each other. Indicate whether the statement is true or false. ANSWER FALSE Through the upstream and downstream chains, the objectives of reducing costs and increasing quality are not independent of each other. The firm that improves its quality will […]
Date: September 3rd, 2020
QUESTION A firm sells some products to a foreign country. The foreign country pays the firm in dollars but in exchange the firm agrees to spend some of the proceeds from the sale on textiles produced by the foreign country. In which of the following types of countertrade arrangement are the two parties engaged? A. […]
Date: September 3rd, 2020
QUESTION A firm that improves its quality control cannot reduce its costs of value creation simultaneously. Indicate whether the statement is true or false. ANSWER FALSE The firm that improves its quality control will also reduce its costs of value creation. The effect is to lower the costs of value creation by reducing both […]
Date: September 3rd, 2020
