Which TWO of the Following Are Positive Impacts for a National

question 22

Multiple Choice

Which TWO of the following are positive impacts for a national economy which hosts a multinational company's (MNC) production facilities within their country? (Choose two.)

• A) Mobile MNCs mean that operations can easily be transferred from one economy to another.
• B) MNCs provide employment opportunities in other countries for skilled workers from the host country.
• C) Local producers can copy superior processes from the MNC which raises productivity within the recipient economy.
• D) Direct financial investment should improve economic welfare as capital is transferred to economies where the marginal rate of return on capital is highest.
• E) MNCs can use transfer pricing to ensure taxes are minimized within a recipient economy.

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Definitions:

Stockholders' Equity

The remaining value of a company's assets after all debts have been subtracted, symbolizing the equity stake of its shareholders.

Treasury Stock

Shares that were issued and subsequently reacquired by the company itself, reducing the amount of outstanding stock on the open market.

Common Stock

An ownership stake in a corporation, represented through a security known as corporate equity ownership.

Retained Earnings

Profits that a company keeps at the end of a fiscal period, after dividends are paid, for reinvestment or debt payment.