Question

The problem of lack of trust with regard to payment and delivery between the importer and the exporter is usually solved by using a(n)

A) trading house.

B) trade bureau.

C) export management company.

D) bank.

E) government.

Answer 1

Option D.

• The problem of lack of trust usually occurs between the exporters and importers due to the difference in the method of transactions they prefer.
• The exporters usually prefer to get the payment for their goods and services before they export it to a foreign country while the importers usually prefer to pay for those goods and services once they receive them.
• This problem between the importer and the exporter is usually solved by a bank who acts as a third party or an intermediary to solve any disputes or problems arising from lack of trust between them during transactions.