--%>

Direct loans-loan guarantees and credit insurance

Do you think that government of the country must assist the private business in conduction of the international trade through the direct loans, loan guarantees, and/or credit insurance?

E

Expert

Verified

Whenever the government of country provides below-market financing directly to the foreign importers, or provides loan guarantees to the domestic banks financing foreign import, or offers low cost credit insurance to the U.S. exporters in order to mitigate the political and commercial risk in sale, this is using taxpayers’ money in order to subsidize foreign trade.  As a result, foreign trade is not paying for itself.  However, if governments of developed countries provide such assistance to their domestic exporters, it becomes really difficult for one in order to refuse in case country desires to have its export-oriented industries to remain competitive.

   Related Questions in Financial Accounting

  • Q : Direct loans-loan guarantees and credit

    Do you think that government of the country must assist the private business in conduction of the international trade through the direct loans, loan guarantees, and/or credit insurance?

  • Q : Good international monetary system

    Explain criteria for the ‘good’ international monetary system.

  • Q : Calculating Dixons Retail plc in

    Q : Creation of North American Trade

    Mr. Ross Perot, former Presidential candidate of the Reform Party, that is the third political party in the United States, had strongly protested in the creation of North American Trade Agreement (NAFTA), however, which was inaugurated in the year 1994, due to fear of

  • Q : Controlling the translation exposure It

    It is, normally, not possible to fully remove both the translation exposure and transaction exposure.  In some cases, eradication of one exposure will also eliminate the other.  However in other cases, removal of one exposure really creates the other. 

  • Q : Matlab Applications in Control System

    Student faces a lot of difficulties in Matlab control system assignments and topics. If you are also having same issues and problems then www.tutorsglobe.com is the best available solution for you. We have highly skilled and experienced tu

  • Q : Asset-allocation funds Mutual funds

    Mutual funds that hold both bonds and stocks. Some asset-allocation funds follow specified allocation percentages and others take advantage of current condition. Those that take advantage of current condition is higher risk, because the fund manager tries to adjust the allocations to take advanta

  • Q : Discuss to what extent does risk and

    to what extent does risk and term structure affects interest rates of financial instruments.

  • Q : Conversion and competitive effects of

    Discuss the conversion and competitive effects of exchange rate changes on the firm’s operating cash flow.

  • Q : Incremental cash flows of capital

    Describe what you mean by the incremental cash flows of a capital project.