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Nevertheless, lack of timely payments may cause the facility to be discontinued. Note: The length of time between the shipment of goods by the seller and the payment by the buyer depends on the credit terms previously negotiated. The purchase order issued by the buyer or the contract of sale represents the terms and conditions of the negotiation. Seller’s advantages and risks v01/20/99 p02/12/99 n May not have to borrow and can use available cash on receipt of the merchandise n May incur foreign exchange risk if the imported goods are priced in the seller’s currency.

The two agencies most likely to assist with financing are: a) ECA. (to finance the purchase of US equipment) d) IFC. (to finance the construction of the plant) Question 13: Select the statement that best describes the difference between an export credit agency (ECA) and a multilateral agency. b) ECAs within countries support the expansion of local exports. Multilateral agencies provide informational and financial assistance to support export activities in countries that lack the resources to do it themselves.

D) NAFTA Question 3: A small country in Latin America requires the inspection of imported toasters. The inspector’s office is open one day a week and is understaffed. This is an example of a(n): a) nontariff barrier. Question 4: One of the reasons tariffs are placed on imported goods is to: c) control imports. Question 5: The trade agreement which creates a common market for Argentina, Brazil, Paraguay, and Uruguay is: a) Mercosur. 1 v01/20/99 p02/12/99 THE TRADE ENVIRONMENT 1-23 þ PROGRESS CHECK 1 (Continued) Question 6: Which multinational agreement / organization has over 100 member countries that account for almost 90% of world trade?

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