Guarantee to an exporter that the importer of his goods will pay immediately for the goods ordered by him, is known as

A. Letter of Credit (L/C)

B. inflation

C. laissezfaire

D. None of the above

Answer: Option A

Solution(By Examveda Team)

Guarantee to an exporter that the importer of his goods will pay immediately for the goods ordered by him, is known as Letter of Credit (L/C). A Letter of Credit, also known as LC or Documentary Credit, is a commonly used instrument for effecting payment between a buyer and a seller. It can be a vital part of mitigating a seller's risk of payment in either international trade or domestic business.