What Is Parallel Importing

question 7

Multiple Choice

What is parallel importing?

• A) Trade customers buy goods cheaper abroad, import them and undercut the manufacturer
• B) A manufacturer piggybacks on another manufacturer's distribution channel
• C) A manufacturer imports and prices two product lines together
• D) Distributors put together a large shipment of different goods to cut costs
• E) An agreement between two companies to swap shipments of goods without any money changing hands

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Definitions:

Excise Tax

A tax levied on specific goods or activities, such as alcohol, tobacco, and gasoline, often intended to discourage their use or to raise revenue.

Sales Tax

A tax imposed by governments on the sale of goods and services, adding on to the purchase price paid by consumers.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivorship benefits.

Regressive

Relating to a taxation mechanism where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income earners.