The Government of Thailand Is Concerned That MNCs Are Adjusting

question 8

Multiple Choice

The government of Thailand is concerned that MNCs are adjusting transfer prices to their Thai subsidiaries in order to decrease their income tax liability in Thailand.The Thai government should

• A)review increases in transfer prices.
• B)review decreases in transfer prices.
• C)initiate price controls.
• D)require forward pricing of all transfer prices.

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Definitions:

Strengthens

To increase in power, magnitude, or effectiveness.

Punishment

The imposition of a penalty as a consequence of an undesirable action, aimed at reducing that behavior.

Negative Reinforcement

A process in behavioral psychology where a response increases because a negative condition is removed or avoided.

Secondary Reinforcer

A type of reinforcer which does not satisfy a basic biological need but has been learned to be valuable through association with primary reinforcers.