There Are a Series of Key Drivers Behind Transfer Pricing

question 1

Multiple Choice

There are a series of key drivers behind transfer pricing decisions of U.S.-based multinationals.The most important of these drivers is thought to be:

• A)competition in the foreign country.
• B)economic conditions in the foreign country.
• C)price controls.
• D)exchange controls.
• E)market conditions in the foreign country.

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Definitions:

Production

The process of combining various material inputs and immaterial inputs (plans, know-how) to make something for consumption.

Constant-cost Industry

An industry in which the costs of production do not change as the industry's total output changes.

Competitive Market

A market where there are many buyers and sellers so that no single buyer or seller can influence the price or market conditions.

Economic Profits

The variance between a corporation's total earnings and all its explicit and implicit expenditures.