What Is the Biggest Advantage of Using a Letter of Credit

question 80

Multiple Choice

What is the biggest advantage of using a letter of credit system?

• A)The exporter is guaranteed pre-export financing.
• B)It allows the importer time to resell the merchandise before requiring payment.
• C)The trust is established,for the importer and exporter,because of a reputable bank.
• D)It guarantees the importer extra funds for other purposes.

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Definitions:

Saving

The process of setting aside a part of current earnings for future use.

Interest Rate

Interest Rate is the cost of borrowing money, typically expressed as a percentage of the amount borrowed, affecting savings, investment, and consumer spending.

Consumption Spending

The total amount of money spent by households and individuals on goods and services for personal use.

U.S. Price Level

The general measure of the inflation or deflation of goods and services prices within the United States, impacting purchasing power and economic policy.