Intro to Exporting (Part 2)

Which of the following is NOT an instrument of trade policy?

• Tariffs

• Quotas

• Subsidy

• Interest rate adjustments

Tariffs are primarily used to:

• Increase domestic consumption of foreign goods

• Reduce the price of imported goods

• Protect domestic industries from foreign competition

• Promote free trade

A quantitative restriction on the amount of a good that can be imported is called:

• Tariff

• Quota

• Exchange rate control

• Export subsidy

A voluntary export restraint (VER) is:

• A self-imposed restriction by an exporting country on the volume of exports

• A government-imposed tariff to discourage imports

• A legal barrier preventing foreign direct investment

• A tax on domestic industries that export goods

Which of the following is an example of a non-tariff barrier (NTB)?

• Ad valorem tariff

• Specific tariff

• Import licensing requirements

• Export duty

An ad valorem tariff is a tax imposed on imported goods based on

• A fixed amount per unit

• A percentage of the goods' value

• The country of origin

• The level of domestic production

What is a key difference between tariffs and quotas?

• Tariffs limit the quantity of imports, while quotas raise import prices

• Quotas generate government revenue, while tariffs do not

• Tariffs provide government revenue, while quotas do not

• Quotas are more flexible than tariffs in adjusting trade flows

Dumping occurs when:

• A country imposes high tariffs on imported goods

• A government provides financial aid to its domestic firms

• Foreign firms sell goods in another country at a price lower than their production cost

• Countries engage in mutual trade agreements

A letter of credit (L/C) is issued by:

• The buyer’s bank

• The exporter’s bank

• The shipping company

• The government

Which of the following is a key advantage of using a letter of credit (L/C) in export transactions?

• The exporter receives payment before shipping

• The importer can delay payment indefinitely

• Payment is guaranteed by the issuing bank if conditions are met

• It eliminates the need for documentation