Assume That DownPillow Sells Pillows to a Japanese Buyer and Forwards

question 29

Multiple Choice

Assume that DownPillow sells pillows to a Japanese buyer and forwards documents and a draft for acceptance. Assume also that DownPillow discounts the trade acceptance to a U.S. bank, which then discounts the instrument in the credit markets. If the pillows turn out to be moldy and worthless, which of the following statement(s) is (are) true?

• A) The Japanese buyer does not have to pay because the pillows are damaged.
• B) The U.S. bank must reimburse whoever bought the instrument and can bring a lawsuit for payment against DownPillow.
• C) The Japanese buyer must still honor and pay the acceptance upon presentation.
• D) A and B.
• E) All of the above.

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Definitions:

Biological Needs

Basic physiological requirements essential for maintaining life, such as food, water, and shelter.

Motives

Internal states or conditions that activate behavior and give it direction towards specific goals or needs.

Equilibrium

Equilibrium is a state of balance or stability within a system, achieved through the equal action of opposing forces.

Drive-Reduction Theory

A theory of motivation proposing that the primary purpose of behavior is the reduction of drives, which are state of tension or arousal caused by biological or physiological needs.