ECONOMICS
TRADE EXCHANGE AND INTERDEPENDENCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Documentary Collection
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Advance payments
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Bilateral Payment Arrangement (BPA)
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Balance of payment
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EXW
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Detailed explanation-1: -There are five primary methods of payment in international trade that range from most to least secure: cash in advance, letter of credit, documentary collection or draft, open account and consignment.
Detailed explanation-2: -For international sales, wire transfers and credit cards are the most commonly used cash-in-advance options available to exporters. With the advancement of the Internet, escrow services are becoming another cash-in-advance option for small export transactions.
Detailed explanation-3: -A payment can be made in the form of cash, check, wire transfer, credit card, or debit card. More modern methods of payment types leverage the Internet and digital platforms.
Detailed explanation-4: -Option c is the correct answer. Bill of lading is not a method of settling payment in the case of international trade. It is an official document that forms the ownership of the goods traded internationally and forms evidence of shipment.