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:

Develop Substitutes

Involves creating alternative solutions or products to replace existing ones, enhancing sustainability or addressing scarcity.

Environmental Wisdom

A perspective acknowledging the importance of maintaining a balance between human needs and preserving the natural systems that sustain life.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured as a percentage increase in real gross domestic product (GDP).

Materials Efficiency

Refers to the measure of how effectively resources and materials are used in the production process to minimize waste and reduce environmental impact.