What Is the Drawback for the Importer in Using a Letter

question 107

Multiple Choice

What is the drawback for the importer in using a letter of credit?

• A)The importer loses control over the process of trading.
• B)The system is skewed heavily in favor of the exporter.
• C)It may reduce his ability to borrow funds for other purposes.
• D)The loan must be repaid even before the merchandise has been solD.

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Definitions:

British Goods

Products manufactured in or originating from the United Kingdom, known for their quality and heritage.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Euros

The legitimate monetary unit for the eurozone, adopted by 19 of the European Union's 27 member countries.

British Pounds

The currency of the United Kingdom, which is one of the most widely used and oldest currencies in the world.