Multinational Enterprises Use Transfer Pricing To

question 54

Multiple Choice

Multinational enterprises use transfer pricing to:

• A)lower prices of their products and gain market share.
• B)reduce their global tax burden.
• C)move products to the markets where the demand for those goods is relatively inelastic.
• D)provide managers in a foreign affiliate with an incentive to maximize local profit.

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Definitions:

U.S. Government

The federal government of the United States, composed of three branches: legislative, executive, and judicial, established to govern the country as outlined in the U.S. Constitution.

Grand Alliance

The coalition of nations, including the United Kingdom, Soviet Union, and United States, that allied to oppose the Axis powers during World War II.

Germany

A country in Central Europe known for its rich history, contributions to art, science, and philosophy, and its pivotal roles in both World War I and World War II.

Russia

The largest country in the world by area, spanning Eastern Europe and northern Asia, known for its rich history, cultural heritage, and as a major global political power.