International Trade Operations
Exam Questions
Course Introduction
International Trade Operations explores the practical and regulatory aspects of conducting business across borders, examining the logistics, documentation, financing, and risk management involved in global commerce. The course covers key topics such as international trade agreements, payment mechanisms, shipping and customs procedures, export-import regulations, and the roles of various intermediaries. Students will gain insight into the complexities of cross-border transactions, learn how to navigate challenges related to currency fluctuations and political risks, and develop skills for managing trade compliance and supply chain strategies in a globalized marketplace.
Recommended Textbook
International Logistics Management of International Trade Operations 3rd Edition by David
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Chapter 1: Introduction
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Q1) NAFTA is a free-trade agreement between the countries of
A) North Africa.
B) North America.
C) North Atlantic.
D) North Asia.
E) None of the above
Answer: B
Q2) The European Union is an economic community that comprises how many countries?
A) 15
B) 25
C) 18
D) 27
E) None of the above
Answer: D
Q3) David Ricardo's Theory of Comparative Advantage explains why countries that enjoy an absolute advantage in making certain goods can still prefer to purchase these products from other countries.
A)True
B)False
Answer: True
Page 3
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Chapter 2: International Supply Chain Management
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Q1) The definition of "international supply chain management" is the same as the definition of "supply chain management," except that it makes explicit the fact that SCM A) is global.
B) is international.
C) includes international activities.
D) All of the above
E) None of the above
Answer: D
Q2) The fact that there is a greater number of intermediaries in international logistics (banks,insurance companies,Customs,and so on)also makes that there is an abundance of ____________________.
Answer: paperwork,paper requirements
Q3) The change in government policies that allowed FedEx and other air carriers to purchase larger aircrafts and compete with other airlines was called
Answer: deregulation
Q4) Logistics management encompasses ____________________ activities than does supply chain management.
Answer: fewer,less
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Chapter 3: International Logistics Infrastructure
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Sample Questions
Q1) Warehouse infrastructure of a country may determine
A) what the transport modes may charge for transportation.
B) how goods are packaged.
C) import duties.
D) All of the above
E) None of the above
Answer: B
Q2) In the United States,paved roads represent ____________________ percent of the road infrastructure.
Answer: 90
Q3) Although there is no equivalent term in English,the French term ouvrages d'art has to do with
A) civil engineering structures.
B) art museums.
C) art galleries.
D) telecommunications.
E) None of the above
Answer: A
Q4) The tunnel between France and Great Britain is called the ____________________.
Answer: Chunnel
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Chapter 4: Methods of Entry into Foreign Markets
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Sample Questions
Q1) Joint ventures are becoming more and more attractive to foreign investors.
A)True
B)False
Q2) Attempts to reduce business practices that include corruption and bribery have been made by the
A) W.O.F.E.
B) sogo shosha.
C) Organisation for Economic Co-operation and Development.
D) foreign labor laws that protect agents.
E) None of the above
Q3) Usually,a distributor is located
A) near the exporter.
B) in the importing country.
C) near the capital city of the importing country.
D) in a neighboring country.
E) None of the above.
Q4) While agents,because they are small businesses,are in many countries protected by that country's labor law,distributors,because they tend to be larger and are assumed to be more sophisticated,are covered in most countries by ____________________ law.
6
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Chapter 5: International Contracts
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Q1) Unless otherwise specified,contracts between an exporter and an agent and contracts between an exporter and a distributor are called
A) contract law.
B) labor law.
C) common law.
D) distribution contracts.
E) None of the above
Q2) An agreement between an exporter and an agent/distributor may state that the laws of the exporter's country apply to governing of the contract.This can be complicated by
A) the practice of many exporters to bribe the judges in their home countries.
B) a shortage of lawyers in the exporter's home country.
C) it being illegal for the exporter to make such an agreement.
D) the government of the country where the agent/distributor is located, as it may say it has jurisdiction over the contract.
E) None of the above
Q3) The contract clause that spells out if a representative will be an agent or distributor is usually the first clause of the contract and is called the _____________________ of appointment clause.
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Chapter 6: Terms of Trade or Incoterms
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Q1) Under Incoterm DEQ,transfer of responsibility for cargo from importer to exporter is at the ship's rail as the cargo is loaded onto the ship
A)True
B)False
Q2) The only difference between the Delivered Ex Ship Incoterm and the Delivered Ex Quay Incoterm is
A) the unloading costs of the ship at the port of destination are borne by the exporter in the Delivered Ex Quay transaction.
B) the unloading costs of the ship at the port of destination are borne by the importer in the Delivered Ex Quay transaction.
C) both importer and exporter share unloading costs of the ship at the port of destination in the Delivered Ex Quay transaction.
D) unloading costs are borne by the ship owner in the Delivered Ex Quay transaction.
E) None of the above
Q3) The customer-focused exporter gives the importer a quote in which the importer can determine which ____________________ should govern the transaction.
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Chapter 7: Terms of Payment
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Q1) An irrevocable letter of credit cannot be canceled by the issuing bank unless the applicant agrees to it.
A)True
B)False
Q2) While a cash-in-advance transaction shows a lack of it,an open account demonstrates that the exporter has ____________________ toward the importer.
Q3) The risk(s)that an exporter takes in requesting cash in advance as a means of payment is/are
A) fluctuations in the exchange rate.
B) it puts the exporter at a competitive disadvantage.
C) it can increase inventory stockouts.
D) All of the above
E) None of the above
Q4) Since a draft (or a bill of exchange)is a legal document in the importing country,the courts in the importing country would consider non-payment by an importer as a domestic issue.
A)True
B)False
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Chapter 8: Currency of Payment (Managing Transaction
Risks)
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Sample Questions
Q1) Although there are many variables affecting the exchange rate of currencies,applications of fundamental forecasting using multiple regression and ANOVA readily overcome the problem of having all these variables.
A)True
B)False
Q2) If it is agreed that an international exchange will be in the currency of the exporter's country,then there is no exchange rate fluctuation risk for the importer.
A)True
B)False
Q3) Documents transferred through SWIFT have the same value as original paper documents.
A)True
B)False
Q4) Under the Interest Rate Parity theory of exchange rate determination,the forward exchange rate should be expressed as a ____________________ if the foreign country is experiencing higher nominal interest rates than the domestic country.
Q5) One of the functions of a nation's central bank is that of a check
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Chapter 9: International Commercial Documents
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Sample Questions
Q1) A careful preparation of all of the documents by the exporter helps the importer tremendously when it is time to clear Customs.
A)True
B)False
Q2) Export quotas can be used to control scarce resources or prices of products for which a country has a monopoly.
A)True
B)False
Q3) Export quotas can be used to control scarce resources or prices of products for which an exporting country faces heavy competition.
A)True
B)False
Q4) An import license is usually provided by an independent laboratory or independent inspection company attesting to composition of certain shipped products.
A)True
B)False
Q5) A Phyto-Sanitary Certificate is for ____________________ products and foodstuffs.
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Chapter 10: International Insurance
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Sample Questions
Q1) Warehouse-to-Warehouse coverage is an extension to the traditional All Risks,With Average,and Free of Particular Average policies.It is an integral part of the Institute Marine Cargo Clause policies for Coverages A,B,and C,for which it is called "Transit" clause.
A)True
B)False
Q2) Institute for Marine Cargo Clauses Coverage B
A) is a "named-perils" policy.
B) includes coverage for goods washed overboard.
C) includes coverage for water damage, and total losses during loading and unloading.
D) All of the above
E) None of the above
Q3) Most air cargo policies are not included in the open cargo policy of a firm. A)True
B)False
Q4) Cargo of exceptional dimensions such as large pieces of equipment which would not fit in a traditional container or would need special arrangements with the shipping line is called ____________________ cargo.
Q5) Most cargo sent by air has ____________________ value.
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Chapter 11: International Ocean Transportation
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Q1) What used to be exclusively bulk cargo,like forestry products and grain,is now being shipped in containers.
A)True
B)False
Q2) Ships too large to pass through the Panama Canal are called
A) tramps.
B) Panamax ships.
C) post-Panamax ships.
D) capesize ships.
E) None of the above
Q3) Break-bulk ships
A) are expected to increase in number.
B) have low labor costs.
C) can call at just about any port to pick up different kinds of cargo loads.
D) All of the above
E) None of the above
Q4) The Ocean Shipping Reform Act allows private,confidential ____________________ between shippers and shipping lines,where traditional liability constraints are replaced by negotiated ones.
Q5) The deepest draft a ship can sit is called the ____________________ line.
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Chapter 12: International Air Transportation
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Q1) The United States governmental agency that has primary responsibility for security issues in air transportation (whether passenger or cargo)is
A) International Air Transport Association.
B) Transportation Security Administration.
C) International Civil Aviation Organization.
D) Customs and Border Protection.
E) None of the above
Q2) Large amounts of _____ enter the United States through the Miami Airport.
A) cut flowers
B) DVD players
C) television sets
D) processed sugar
E) None of the above
Q3) Most airfreight on passenger planes is not palletized but is
Q4) Combination aircrafts are mostly used on heavily-traveled routes,and used when urgent freight must take priority over passenger traffic.
A)True
B)False
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Chapter 13: International Land and Multi-Modal Transportation
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Q1) Trucking,from a North American perspective,is
A) domestic.
B) heavy between the United States and Canada.
C) involved in some trade across the U.S.-Mexico border.
D) All of the above
E) None of the above
Q2) In Europe,some trucking companies register their vehicles in other countries in order to avoid ____________________.
Q3) In 2007,U.S.railroads had a market share of _____ of all long-distance ton miles shipped.
A) 40 percent
B) 35 percent
C) 22 percent
D) 12 percent
E) None of the above
Q4) Heightened inspection levels have delayed border crossings worldwide.
A)True
B)False
Page 15
Q5) Overloaded trucks are common in ____________________ and some parts of Asia.
Q6) River barges mostly carry ____________________ cargo.
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Chapter 14: Packaging for Export
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Q1) If goods in a container are not unitized,they are usually sufficiently protected by their regular secondary packaging.
A)True
B)False
Q2) Companies rarely develop a strategy for packaging,since they consider it an area that does not have strategic implications.
A)True
B)False
Q3) Single shipments that are too small to be shipped as a full container are _____________________ by a freight forwarder or a NVOCC with other freight and then shipped in a full container.
Q4) Containerized cargo is handled more frequently than break-bulk cargo.
A)True
B)False
Q5) The multi-wall shipping bag can hold about ____________________ pounds of material.
Q6) To protect against condensation damage inside a container,the container's interior floor and,ideally,its interior sides should be made of ____________________.
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Chapter 15: International Logistics Security
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Q1) Countries located outside of North America and Europe do not feel threatened by terrorism and therefore have not cooperated with international security measures.
A)True
B)False
Q2) Countries outside of Europe and North America reacted with policies that mirrored the policies of which country or area?
A) the United States
B) the European Union
C) Canada
D) All of the above
E) None of the above
Q3) The SAFE initiative was implemented by
A) the U.S. government
B) the World Customs Organization
C) the World Trade Organization
D) the International Maritime Organization
E) None of the above
Q4) The primary goal of the International Chamber of Commerce is to facilitate international ____________________.
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Chapter 16: Customs Clearance
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Q1) The United States requests the "sewing tickets" for some garments,an internal work document of the garment factory,as well as the time cards of the employees working there in an attempt to determine the country of origin of textile products.This can be an example of a non-tariff barrier.
A)True
B)False
Q2) A medical device is not legal in country A,but is legal in country B.Despite being restricted from country A,the product is allowed to go through the foreign trade zone of country A on its way to country B.
A)True
B)False
Q3) Countries may require pre-shipment inspections because
A) the country wants an expert opinion on the classification and the value of the products about to enter its territory.
B) it increases the tariff valuation of the product.
C) it speeds the Customs process.
D) All of the above
E) None of the above
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Chapter 17: Using International Logistics for Strategic Advantage
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Q1) In international trade,improper packaging
A) can allow an insurance company to deny a claim.
B) can cause ill-will on the part of the importer.
C) can have disastrous consequences on the goods being shipped.
D) All of the above
E) None of the above
Q2) A native speaker of English can use computer-translation software to determine whether his English will be understood by a foreign correspondent,by translating into a foreign language and then ____________________ into English.
Q3) In considering the speed at which an e-mail from a foreign interlocutor should be answered,the best strategy is to ____________________ what has been observed from other contacts in that country.
Q4) Special English is used for written communications,just as International English is. A)True B)False
Q5) The technique developed by the British Broadcasting Corporation to communicate clearly and accurately with non-native English speakers is called
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