What Is the Primary Advantage of Operating Interdependent Subsidiaries

question 5

Multiple Choice

What is the primary advantage of operating interdependent subsidiaries?

• A) It reduces the need to control subsidiaries and to coordinate their activities.
• B) It allows the company to integrate scale-efficient operations and to cross-subsidize subsidiaries when necessary.
• C) It provides an opportunity to balance the interests of subsidiaries with the needs of the headquarters. .
• D) It prevents subsidiaries from becoming too independent or uncontrolled.

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Definitions:

Aggregate Demand Curve

A curve that represents the total demand for goods and services in an economy at various price levels, assuming all other factors remain constant.

Price Level

An index reflecting the mean of current prices for a wide array of products and services in the economy.

Imported Raw Materials

Raw or unprocessed goods brought into a country from abroad for use in manufacturing or production.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by an economy in a given year, expressed in base-year prices.