10. Which of the following is true of foreign trade zones (FTZ)? An FTZ is a tax
ID: 2747035 • Letter: 1
Question
10. Which of the following is true of foreign trade zones (FTZ)?
An FTZ is a tax-free enclave and not considered part of the country as far as import regulations are concerned.
In a free port or FTZ, payment of import duties are not postponed until the product leaves the FTZ area and enters the country.
When an item leaves an FTZ and is imported officially into the host country of the FTZ, all duties and regulations are removed.
Firms that are located in an FTZ usually resort to dumping of goods.
An FTZ is subject to stricter income and corporate tax laws as compared to the rest of the country.
12. Which of the following is true of forfaiting?
The forfaiter buys debt from the exporter, typically a promissory note or bill of exchange, on a nonrecourse basis.
Forfaiting takes place when a company has an ongoing relationship with a bank that routinely buys its short-term accounts receivable at a discount.
Forfaiting is the same as factoring.
Forfaiting is employed when special merchandise is ordered or when shipping is hazardous.
Forfaiting is used when a company has large cash reserves to sustain non-payments by customers.
15. Which of the following is true of inflation?
Inflation tends to prevent escalation of consumer prices.
Inflation results in ever-decreasing prices, creating a positive result for consumers, but puts pressure to lower costs on everyone in the supply chain.
In an inflationary market, it is essential for a company to keep prices low and raise brand value to win the trust of consumers.
Since inflation reduces consumer prices, more consumers enter the market.
In countries with rapid inflation, goods often are sold below their cost of replacement plus overhead.
16. Which of the following is true of letters of credit?
With letters of credit, the seller assumes all risk until the actual dollars are received.
The process of getting a letter of credit usually takes a year or longer.
Letters of credit shift the buyer’s credit risk to the bank issuing the letter of credit.
The procedure for a letter of credit ends with completion of the contract.
An irrevocable letter of credit can be altered by the buyer without the permission of the seller.
17. Which of the following is true of dumping?
Dumping is the process of selling products in a foreign market at a price above their cost of production.
Dumping is the process of selling goods in a foreign market above the price of the same or similar goods in the home market.
Dumping usually results when home-country demand exceeds production capacity in the country.
Dumping results when foreign goods of poor quality are sold in the domestic market.
Countervailing duties can be levied if it is shown that domestic producers are being directly harmed by dumping of foreign goods.
18. Which of the following is true of distribution costs?
In countries where value-added tax is noncumulative, tax is paid only on the difference between the middleman’s cost and the selling price.
Designing a channel that has fewer middlemen may increase distribution costs.
Fewer middlemen lead to higher overall cumulative taxes on goods and higher distribution costs.
In a country where taxes on goods are cumulative, firms have an incentive to maintain longer channels of distribution.
Shorter channels of distribution can help reduce the prices of final goods.
19.
The company that views pricing as a static element in a business decision:
exports only excess inventory.
sets prices to achieve a specific objective such as targeted market share.
sets prices rather than following market prices.
views its export sales as a major source of sales volume.
places a high priority on foreign business.
23.
Which of the following is true of pricing?
The price of a good and its terms of sale are based solely on conditions in the domestic market.
The larger the number of countries involved, the less complex is the process of controlling prices in a global market.
The less control a company has over the final selling price of a product, the better it is able to achieve its marketing goals.
The broader the product line, the more complex is the process of controlling final selling prices.
Companies always have the ability to control end prices.
25.
A group of international firms decide to set the prices of a key chemical ingredient that is used in the production of fertilizers. They do this by restricting the quantity produced of the chemical and allocating market territories to each firm. In other words, these firms are called _____.
middlemen
an advocacy group
a trade union
an industry lobby
a cartel
Explanation / Answer
10.
An FTZ is a tax-free enclave and not considered part of the country as far as import regulations are concerned.
FTZ are not considered as far as regulation is considered. It is a tax-free enclave.
12.
The forfaiter buys debt from the exporter, typically a promissory note or bill of exchange, on a nonrecourse basis.
It is a specialized technique to reduce risk of nonpayment by importer instances where the importing firm is perceived by exported as too risky.
15.
In countries with rapid inflation, goods often are sold below their cost of replacement plus overhead.
In case of rapid inflation, goods are often sold below their cost of replacement plus overhead.
16.
Letters of credit shift the buyer’s credit risk to the bank issuing the letter of credit.
It helps in making the business easy especially in foreign market as the risk is bear by the bank.
17.
Countervailing duties can be levied if it is shown that domestic producers are being directly harmed by dumping of foreign goods.
Dumping is the practice when companies are selling the product in foreign market at low cost while in domestic market at high prices.
Note: Please be specific to the question that need to be answered.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.