Fact Pattern 9-1 First State Bank Issues a Letter of Credit in Favor

question 65

Multiple Choice

Fact Pattern 9-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.

-Refer to Fact Pattern 9-1.To obtain payment, Lapland must comply with all of the requirements of the letter of credit

• A)strictly.
• B)substantially.
• C)reasonably.
• D)materially.

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Definitions:

Marginal Productivity Theory

An economic theory that explains income distribution based on the productivity of the factor inputs in producing goods and services.

Income Distribution

The way in which a nation’s total income is spread among its population, affecting economic inequality.

Output Value

The total value of all goods or services produced by a firm or economy, often measured in terms of monetary value.

Imperfectly Competitive Market

A market structure where the assumptions of perfect competition, such as a large number of buyers and sellers, homogeneity of products, and free market entry and exit, are not fully met.